We are in a period where the economic news seems very confused and inconsistent. The stock market has rebounded significantly from its low point earlier this year, but unemployment continues its inexorable climb. Some investment banks have earned huge profits, but businesses are forecasting a grim, cautious holiday spending season. And then today we get the latest news on foreclosures — and it is stunningly bad. The third quarter of 2009 turns out to be the worst quarter for foreclosures of all time. It is worse than the very bad second quarter of this year, and 23 percent worse than the third quarter of 2008.
937, 840 homes — almost 1 million homes — received a foreclosure notice during the quarter, which is about one out of every 136 homes nationwide. Get this: in Nevada, the state that was worst hit, one out of every 23 households received a foreclosure filing. It is hard to imagine what the hardest-hit Nevada neighborhoods look like. During the quarter more than 237,000 homes were repossessed. We are all used to dealing in big numbers, but these numbers are truly staggering. In just one three-month period of just one year, the owners of almost one million homes reached the point where their lenders gave up and resorted to the ultimate option of foreclosure.
Given these numbers, we shouldn’t be too thrilled by the glimmers of positive economic news. Unfortunately, the net worth of many Americans is significantly tied up in their homes. Even if those homes aren’t in foreclosure, the housing market will likely be depressed for a long time. There are a lot of empty houses there to be purchased before prospective homebuyers start bidding up the current prices for existing homes. We aren’t going to see a true recovery, and a significant increase in consumer confidence, until the housing market rebounds, and these latest figures indicate that that development may be far into the future.