This is an intriguing forecast out of TransUnion in the FT:
“The proportion of US borrowers who have slipped behind on mortgage payments will fall in 2010 for the first time since the financial turmoil began in a sign that the nation’s housing crisis is abating, the credit bureau TransUnion forecasts on Tuesday . . .
After studying 27m consumer records, TransUnion predicts that the rate of mortgage delinquencies – the ratio of borrowers who are 60 or more days behind on payments – will peak in early 2010 before falling towards the end of the year.
In the third quarter of 2009, delinquencies hit 6.25% of mortgages – about three times the historical norm. They are estimated to reach 6.56 per cent at the end of this year, and then settle at 6.39% in 2010, the Chicago-based group forecasts, as unemployment falls, house prices rise and subprime loans are renegotiated or expire.”
I do not agree with this forecast, but it would be a huge boost if it turns out to be true: Not only a boost for the economy, but a huge help for the banking sector, which has only seen modest incremental improvements . . .
UPDATE: December 8, 2009 11:42am
Of course, nearly every forecast made prior to the Lehman faceplant was wrong:
Forecast: “The national 60-day mortgage delinquency rate among mortgage borrowers is expected to continue to rise throughout 2008 from a value of 3.53 percent in the second quarter of 2008 to just over 4 percent by year end,” said Carson. “This is primarily due to the continued economic weakness in certain segments of the country combined with the continuing fallout of the mortgage crisis.
“However, TransUnion forecasts that later in 2009 the rise in mortgage delinquency rates will taper off as economic conditions improve and home prices begin to stabilize. As far as state projections go, Nevada (8.7 percent) is anticipated to experience the highest average delinquency rate by the end of 2008, while North Dakota (1.3 percent) is expected to show the lowest level of delinquency. (Emphasis added)
Never mind . . .
US mortgage delinquencies to fall in 2010
Francesco Guerrera and Helen Thomas
FT, December 7 2009
TransUnion.com: Mortgage Loan Delinquency Rates Rise for the Sixth Straight Quarter
Sep 08, 2008