“U.S. homeowners who defaulted last month outnumbered those who caught up on payments, signaling the housing recession deepened even as Bank of America Corp., Wells Fargo & Co. and other lenders sought to help borrowers.,” writes Josh Hamilton at Bloomberg. The “housing recession deepened” . . . sounds gloomy!
Say, wait a minute. I’ll bet defaults outnumber cures most months, especially lately. In fact, I’m sure of it. Isn’t the more relevant number the ratio of cures to defaults, relative to the prior month and a year ago? I bet it is! And if you look at the actual data, you’ll see that cure-to-default ratio actually rose last month, to 63.6%, from 59.9% in May and 55.5% a year ago. In June of 2007, furthermore, the ratio declined compared to May. Putting aside seasonal strength that tends to occur every February through April thanks to tax refunds, last month’s cure-to-default reading was the highest since August of 2007, and the second-highest since mid-2006, when housing crackup was just getting started.
This is the sign of a worsening housing situation? Just the reverse. It wouldn’t kill Hamilton, I don’t think, to veer from the media’s everything’s-going-to-hell script when the facts warrant.
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