The foreclosure crisis is finally nearing an end, at least according to Bill Emmons, an Economist and Assistant VP with the St. Louis Fed in conjunction with the St. Louis Fed’s quarterly Housing Market Conditions report.
Emmons says that while some states are still taking a longer time than others to hit pre-crisis foreclosure and delinquency levels, the end is near, perhaps as soon as the first quarter of 2017. He adds that the condition of current mortgage borrowers is once again comparable to the period just before the Great Recession and the onset of the foreclosure crisis in the fourth quarter of 2007.
“However it is defined, the mortgage foreclosure crisis will go down as one of the worst periods in our nation’s financial history. For the nation as a whole, the crisis will have lasted almost a decade—about as long as the Great Depression,” says Emmons. “The conclusion that the foreclosure crisis has been a long, miserable experience for many is unavoidable. And many Americans continue to suffer lasting financial, emotional and even physical pain as a result of their experiences during this time. However, a look at the data today shows that, at least, the end is in sight.”
Emmons adds that in looking deeper at regional and state levels, some areas have experienced severe recessions and housing crises worse than the nation as a whole. In contrast, however, he notes that other metros have suffered less, resulting in a wide range of foreclosure-crisis experiences.
Further the report says that an analysis of the states that comprise the St. Louis Fed’s Eighth District (Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee) show each of the states entered their respective foreclosure crises during 2008-2009. Emmons says this is somewhat later than the nation as a whole, but by the third quarter of 2016, six of the seven District states had exited their respective crises, with Illinois expected to follow by the end of 2016.
“For most states in the Eighth District, the slightly shorter duration of their foreclosure crises, when measured against their own data trends, has been offset by higher average rates of serious mortgage distress seen even in non-crisis periods,” says Emmons.
Kendall Baer wrote this story for DS News