July's Pre-foreclosure Numbers
I bought my first house 10 years ago, in July, 1998. Prior to the purchase I was living in a nearby apartment complex, paying $435/month for a 2-bedroom, 1 bath. I (over)paid $86,500 for the house, putting 3% down, so my monthly payments, at roughly $600, were ~35% higher than my rent--a reasonable premium to me, considering I'd suddenly be living and building equity in "my own place."
Today, zillow.com says the house is worth about $192,000, and monthly payments at 3% down would come to just under $1300/month. By comparison, you can still rent that 2 bedroom apartment for around $600. Doing the same math again, I don't think I'd come to the conclusion that the "ownership premium" is really worth it. Would you?
You might be wondering what my little story has to do with July's notices of trustee's sales--which, at 6412, as you can see from the graph, were lower than June's. Bush's housing bailout bill recently became law, which may mean that we have just passed the peak for home foreclosures--and soon we may even see a stop to falling home prices. Great news for current home owners, but, as my personal anecdote suggests, not-so-great news for housing affordability in general. The bailout essentially is a subsidy to current home owners at the expense of future home owners.
Because it will prop up current prices beyond where they would have naturally fallen, housing affordability will remain low, encouraging the spawning of all sorts of new government programs to help address "the affordability gap" (or some such wealth-transfer justificationist nonsense)--making money cheaper than it actually is, which will in turn encourage sellers to raise their prices still further while at the same time creating homeowners out of people who probably aren't fiscally responsible enough to be ones. Is this sounding familiar, yet?
As a non-homeowner who is making twice what he made in 1998 but would have an extremely hard time justifying paying $1300/month to own a crappy house, I would have preferred if Congress could've just left well enough alone.