News today from the Case-Shiller home-price index says home prices in the nation's largest cities plunged to new depths in March. The index says these are the worst housing numbers since the Great Recession.[more]
EL MIRAGE, Ariz. — The nation’s biggest banks and mortgage lenders have steadily amassed real estate empires, acquiring a glut of foreclosed homes that threatens to deepen the housing slump and create a further drag on the economic recovery.[more]
All told, they own more than 872,000 homes as a result of the groundswell in foreclosures, almost twice as many as when the financial crisis began in 2007, according to RealtyTrac, a real estate data provider. In addition, they are in the process of foreclosing on an additional one million homes and are poised to take possession of several million more in the years ahead.
Five years after the housing market started teetering, economists now worry that the rise in lender-owned homes could create another vicious circle, in which the growing inventory of distressed property further depresses home values and leads to even more distressed sales. With the spring home-selling season under way, real estate prices have been declining across the country in recent months.
it's just basic supply and demand again: the more houses on the market, the lower the price. foreclosures have swollen the supply, slowing sales and forcing sellers to cut asking prices.
we need to freeze foreclosures, but that's only part of the solution. as long as banks can make more money trading on financial markets, they have little motive to lend, so when interest rates are low it's extra hard to get a mortgage, which also slows sales and depresses prices. we need to reinstate glass-steagall (1933).