Friday, Jul 16, 2010
A similar story in the UK?
Bloomberg: US Housing Bubble Leaves $4 Trillion Hangover: Chart of the Day
"The bursting of the U.S. housing bubble has left homeowners buried under about $4 trillion of excess mortgage debt, according to Dhaval Joshi, the chief strategist at RAB Capital".
Posted by alan @ 10:22 PM (785 views) Add Comment
6 Comments
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1. novice pete said...
This stuck in my mind for some reason, "The U.S. has 4 million more homes than it needs, by his count".
Could they then just demolish these unneeded homes?
or, how about housing these people
http://www.guardian.co.uk/world/2009/nov/12/un-investigator-us-neglect-homeless
2. novice pete said...
From the article link I posted,
Los Angeles, which is described as the homeless capital of America, has endured an 18-fold increase in housing foreclosures. Evictions from owned and rented homes have risen about tenfold, with 62,400 people forced out last year in Los Angeles county.
Welfare payments are not enough to meet the rent, let alone food and other necessities. A single person on welfare living in Los Angeles receives $221 (£133) a month – an amount that hasn't changed in a decade. The rent for one room is typically nearly double that.
Rolnik said that while she saw difficult conditions in all the places she visited, the worst was on the Native American reservation of Pine Ridge in South Dakota.
"You see total hopelessness, despair, very bad conditions. Nothing I have seen in other cities compared to the physical condition of the housing at Pine Ridge. Nothing compared to the overcrowding. They're not visible, they're isolated, they're far away. They're just lost," she said.
Rolnik says that one of the greatest matters of shame is that the US has the resources to provide decent housing for everyone.
"In the US, it's feasible to provide adequate housing for all. You have a lot of money, a lot of dollars available. You have a lot of expertise. This is a perfect setting to really embrace housing as a human right," she said.
Rolnik has given a verbal report to the US state department, which has a month to respond to her observations. She will submit a final written report to the UN human rights council early next year.
not seen much of that in the mainstream media, just more 'Sarah b and Kirsty Allflop'
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4. tenyearstogetmymoneyback said...
I don't quite understand the graphs.
The top one seems to imply there is no equity in the housing market while the bottom one show it is around 40%.
Does anyone know what the situation is in the U.K. We were discussing this recently at work. Several people have paid of
their mortgages. I don't have one (or property). By according to the statistics someone must be heavily in debt but we
can't work out who these people are (unless its just the small number of extreme cases you see on TV e.g 50 125%
buy to let mortgages on almost worthless properties).
I remember enough about mathematical distributions from school that I would love to see some graphs. Does anyone
have any ?
5. mark wadsworth said...
@ Tenyears, the BoE publish these figures as part of their regular "Financial stability report".
In broad terms, about half of UK houses have a mortgage on them, and the distribution of mortgages between 1% LTV and 105% LTV is more or less a straight line. The number of people in nequity = the number of people with more than 100% mortgages, of course. I've not seen any stats recently on how many of these there are.
Further, that US chart probably understates the amount of Nequity - if Mr A and Mr B both own houses worth $100,000 and Mr B has a $250,000 mortgage, the total nequity is $150,000 ($250,000 minus $100,000) according to the chart published it would only be $50,000.
6. tenyearstogetmymoneyback said...
Mark
An interesting example you give which sort of illustrates my point.
In the example you give only 50% of the population of Mr A & B have a problem.
If they both had $125K mortgages then 100% of the population has a problem.
Hopefully they take this sort of information into account when making policies.