Macro #1

Roelof Wesseling

Eco.2013

Noe

U.S. FORECLOSURE RATE SOARS

The number of U.S. forecloser filing's in the month of August doubled versus August of 2006 and jumped 36 percent from July, a trend that signals that homeowners are unable to make their payments on their mortgages or sell their homes due to the market being so slow. There were a total of 243,947 forecloser filings were reported in August up 115 percent 113,300 in August of last year. Another fascinating fact is that in the month before, July, there were 179,599 forecloser filings! These numbers are astronomical! Of course these filings include default notices, auction sale notices and bank repossessions. Our lovely state of Florida registered the third highest forecloser rate among the states, with one forecloser filing for every 243 households. The state reported 33,932 forecloser filings, which is up 77 percent from July's and more than doubled of this months in the previous year, this shows that homeowners can't make payments and that people are ditching their investment properties. The only two states that had higher rates than Florida were Nevada and California, Nevada's being the worst with one forecloser for every 165 households. These are the highest number of forecloser filings reported in a single month since RealtyTrac started tracking monthly filings two years ago. Here is a scary thought the company said that the national forecloser rate was one for every 510 households. One big reason for this problem is the fact that when the

homeowner went and got their mortgages they got handed a "teaser" interest rate, but then can adjust upward, resulting in payment shock when the homeowner receives their bill. Many of these loans were given out in 2005 and in 2006 during the height of the housing bloom and in as little as two years have adjusted drastically. The number of bank repossessions was 42,789 in August compared to 20,842 in the previous year so this number has also more than doubled in one year's time.

What does this have to do with economics? Well all these foreclosers will cause people to be in debt and in return will begin to hurt our economy because if people don't have money to spend then they can't pay for goods and services so this is just one big circle and in the end it will ultimately put hurt on our economy. Another way is that people are now scared to invest in a home why should they when they can just rent and not have to worry about falling into debt so they will do just that rent instead of purchasing land. I think we can all agree that if the housing market keeps going in this direction then not to long down the road no one will be in the market for buying a home they will do as I said before rent and rent until the day they die