US distressed home backlog could threaten market

The massive number of distressed homes still to be listed on the market in the US could prove a further threat to the fragile housing market, states property research firm CoreLogic.

The firm’s national inventory of foreclosed homes uncovered around 1.8 million homes that were over 90 days in arrears on their mortgage payments or had already begun the foreclosure process. Although down slightly on the 2 million homes that were in this ‘pre distressed sale’ category in January 2010, the latest figures still bely a large glut of homes to be sold at discount prices, which could continue to drive average home values down.

“While the trend of shadow inventory is improving somewhat, the current level and distressed months’ supply remain very high”, stated CoreLogic’s chief economist Mark Fleming in a statement yesterday. The current level of homes in default represents nine months’ supply of properties, compared to the six months’ supply usually present in a healthy market.

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Submited at Thursday, March 31st, 2011 at 7:01 pm on News by arrisa
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