Housing Crisis Has Not Touched Bottom.

by Ken Kappel on July 1, 2012

Beyond what you’re reading in the rah-rah corporate press, or info put out by politicians, there is strong evidence that we have not seen the bottom in the housing market.

“According to Michael Lombardi, lead contributor to Profit Confidential, the major issue concerning the housing market index is a recent mortgage settlement that will alter the U.S. housing market in the coming years. Now that the lawsuit is settled, Lombardi believes foreclosures will keep prices down.” The article: “Housing Crisis Getting Worse, According to Leading Financial Newsletter Profit Confidential,” can be read by following the link, or, read it directly below.

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“In the article, “U.S. Housing Crisis Getting Worse, Not Better,” Lombardi comments that the $25.0-billion settlement with the banks that took place in April allowed for the foreclosure increase in May by 9.1% from April’s level, the first increase in two years.”

“These new foreclosed properties slowly making their way onto the housing market will result in greater housing inventory and will drag down home prices,” says Lombardi. “If May is any indication of how the rest of 2012 will go, then home prices are going to have real trouble rising in this environment.” [Emphasis Added.]

“According to Lombardi, there are other troubling statistics that will ensure continued pressure on home prices and the housing market in general.”

There are over 2.8 million homeowners behind more than a year on their mortgages,” says Lombardi. “Homeowners who are this far behind with their mortgages usually never catch up. Their homes either go up for auction or go into foreclosure, or the homeowner eventually just walks away.” [Emphasis Added.]

“Lombardi believes this will add to inventory in the housing market and prevent home prices from rising.”

An alarming one in five homeowners has been more than 90 days delinquent on their mortgage since 2007,” says Lombardi. “These people cannot qualify for a new mortgage at a lower rate because of their poor credit score.” [Emphasis Added.]

“Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market… before it plunged.”

“Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.”

Ken here. There you have it. Act Accordingly.

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