Spain's Housing Market Continues To Melt Down, US House Prices Begin To Cool

Confounded Interest ^ | 10/18/2013 | Anthony B. Sanders

[whitedog57]

Poor Spain. The economic news continues to be woeful, even though Spain’s Prime Minister Mariano Rajoy thinks the worst is over.

But Spain’s housing and mortgage markets continue to melt down Spain currently has a record high default rate on loans of 12.2%.

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And Spain’s number of newly mortgaged properties keep declining.

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If we overlay Spain’s continually declining house prices, we get an interesting picture … of continued decline in Spain.

spainhpdelinqloans

Here is a chart for the US housing and mortgage market. The US also has declining residential mortgages outstanding, but at least has turned the corner on serious mortgage delinquencies (gold line) and house prices (green line).

usreshp

Here is a chart of US mortgage loans and the MBA’s Purchase Application Index. Mortgage purchase applications fell off the proverbial cliff in Q4 2007 and in 2008-2010.

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We know that investors are driving the housing market in the US, but we have to be concerned if the investor appetite starts to cool. As Zillow noted today, Housing Market Shows Welcome Signs of Cooling in Q3.

Maybe Spain would be better off with retired Yankees reliever Mariano Rivera as Spain’s Prime Minister.

Mariano-Rivera-Photograph-C12186332

[whitedog57]

The US has a lot more in common with Spain than we think!

[Zathras]

Spain is lovely and most people are very nice.
The question I kept asking after being there 3 weeks was:
“What do this people do for a living that they can party till 4am?”

Now I know!

[dfwgator]

"Miss Me Yet?"

[Dr. Ursus]

Yes, and they were all under my hotel window!

[Buckeye McFrog]

When you can walk around and look at houses and say to yourself “I wouldn’t pay that much for that house no matter WHERE it was”, it’s all a bubble created by cheap money.

[BfloGuy]

How can the housing market recover when 9 million fewer people are working? There's no possible way.

Shows you just how stupid about economics almost everyone in this country really is.

[Gene Eric]

>> The US also has declining residential mortgages outstanding, but at least has turned the corner

?