Investment adviser John Lounsbury today tries to wrap his arms around the national housing crisis in a post on the investment blog Seeking Alpha. Here are three of his nine summary points:
1. It has been estimated that there will be 8.1 additional foreclosures by the end of 2012. This is 21% of all mortgages.
2. It has been estimated that 19 million mortgagees will owe more than their house is worth by 2010. This is 50% of all mortgages.
3. It has been estimated that about 6.5 million mortgagees will not be able to afford their mortgage payments at some time during the term of the mortgage. This is 17% of all mortgages.
His conclusion? "Federal intervention to solve the housing crisis would consume too much resource that would be better used to stimulate future economic growth."
Housing: Where Is the Bottom? [Seeking Alpha]
Graph from Credit Suisse