US foreclosures hit record high

Marco sent in the link to this story in the G&M about the US market where foreclosures have reached a record high for the third consecutive month (now at .65 percent of all mortgage holders) with signs that more are on the way:

The delinquency rate, which tracks the number of people who are behind in their payments but have not yet entered the foreclosure process, was also up sharply during the spring, rising to 5.12 per cent of all loans, up nearly three-fourths of a percentage point from the same period a year ago.

Doug Duncan, the MBA's chief economist, said the worsening performance was driven by two factors — heavy job losses in the Midwest states of Ohio, Michigan and Indiana and the collapse of previously booming housing markets in California, Florida, Nevada and Airzona.

The interesting thing about those 'previously booming markets' is that as far as I know they weren't hit by any economic shocks, they simply collapsed under their own weight and suddenly ran out of demand.

Analysts said the problems in the formerly red-hot housing markets of California, Florida, Nevada and Arizona reflected in part speculators walking away from mortgages they can no longer afford.

During a five-year housing boom, the prices in these areas surged, creating what many analysts have described as a speculative bubble as investors bid up the price of homes hoping to quickly resell them for a profit.

Coincidentally this is also the third consecutive month that Vancouver has neared record sales volume.