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S&P / Case-Shiller Home Price Numbers

Case-Shiller Home Price Numbers – A Deeper Look

A first glance of the recent Case-Shiller index sees seasonal strength. This is expected as summer typically provides a stronger period of both home price and demand.

Yet, will this seasonal strength provide a cyclical floor?

Let’s look at some projections in debt quality:

Fitch rating services shows a plunge in the Cure rate.

www.housingwire.com/20.../

Note that Fitch reports the CURE rate for prime plummeted from 45% to 6%. This is huge! That is, only 6% of troubled homeowners who have slipped into problems (and temporarily bailed out by taxpayer largess) will STAY out of trouble. The other 94% will sink yet again into insolvency.

And this is the report for prime loans. The subprime and Alt-A are even worse. Fitch reports that only 5% of delinquent homeowners will be able to eventually become current on their mortgage payment after rate resets.

Now, those who have been following the national US housing market already realize that the foreclosures for sub-prime homeowners has already peaked. Following near cessation of subprime home foreclosures the national housing price has only regained 1.3% - this is the heralded ‘recovery’!

More ominous clouds on the horizon are the large wave of Alt-A resets just now coming online. This wave is just as large as the subprime loans.

Per Fitch, the numbers of Alt-A debtors who can expect to survive payments is now at just 5%, and falling.

Bottom line: Sell now to the ‘speculators’, if you can.

The buying opportunity will arise in another 2-3 years.