My Financial Healthcheck

As housing values continue to fall the home mortgage debt outstanding in 2008 was 73% of GNP (Gross National Product), though this was down from the bubble high of 75% in 2006/2007, these levels once were an average of 46% in the 1990’s.  What this means is homeowners won’t have the equity they once had to support lifestyle or education needs, which could cause GNP to grow much slower than some predict if we somehow come out of this recession.  Total mortgage debt in the U.S. is $10.5 trillion…which means allot of zeros after the 5.  In April mortgage rescues went up to 270,000 homeowners from 250,000 in March. Despite this effort, 64,751 homes were sold out of a foreclosure, up 22% from March. Sales of foreclosed homes drag down the value of homes in their surrounding area.  The home resale market ticked up 2.9% in April, first-time homebuyers continue to make up most of the sales.  The median price of home sales was down 15.4% from the previous year.  Unsold inventories are in the 5 month range, all these results are based on the lowest mortgage rates ever, so with rates going up these results could worsen.  Mortgage applications fell 14.2% in the most recent data, a direct result of the recent rise back over 5%.  Bond yields have reached their yearly high and mortgage rates have followed, the Federal Reserves buyback effort has fallen flat as of late.  If mortgage rates do not come back down expect many of the recent good signs in some economic reports to worsen.