It's now clear that in recent months the good news about the economy in general and the housing market more specifically, has outweighed the bad news. And that's a very good thing.
I'm curious though how much recovery in housing can really occur without a stabilization, at least, or bettery yet, turn around, in the unemployment rate. I read this morning in an Associated Press article, that a record 13% of homeowners are now behind on their mortgage payments or are losing their home. "As of the end of June, 4% of all borrowers were in foreclosure, while about 9% had missed at least one payment."
What's particularly concerning to me is that a significant portion of the recent filings and missed payments are not related to the sub-prime mortgages we've all heard so much about, but are now being driven by borrowers with traditional fixed rate mortgages. So it's not a rate caused affordability gap.
It's something else; like loss of income related to loss of employment. Putting people back to work and minimizing future layoffs is fundamentally critical to sustaining the month over month improvements we've begun to see in housing this year.
Some of my colleagues believe that with the presence, in fact dominance of so many dual income households today, that we kind of have a built in insurance program that we've not had in past downturns. When one spouse loses their job, at least they have a second income to cover the most important basics, like food and shelter.
I'd be curious what you think. How much protection will dual income households offer in terms of avoiding foreclosure in the event of one spouse gets a pink slip?