Although mortgage rates have plunged to record lows, falling borrowing costs have failed to revive the US housing market. Indeed, the Washington deliberations, which will centre on what the level of government support for Fannie and Freddie should be, comes amid continuing pain for homeowners.
In the average congressional district, serious mortgage delinquency rates – defined as borrowers more than three months behind on their payments – are 9.4%, compared to 3.3% at the time of the election in 2008, according to a study by Deutsche Bank.
“That pace of deterioration alone should put housing and mortgage finance on most political radars,” said Steven Abrahams, managing director at Deutsche.
The problem remains concentrated in states such as Florida, California and Nevada. More than one in five borrowers (over 20%) are at least three months overdue on their mortgage payments in 23 congressional districts – including 13 in Florida, six in California and two in Nevada.
Will this malaise be found in the UK or is it already here?
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