An analysis of the housing market in the Bay Area counties of Contra Costa, San Francisco, Alameda and San Mateo in California led to a projection that mortgage delinquencies would rise by the end of 2009.
According to the market projection, one in every 10 homeowners with mortgages will miss two months of payments by the end of 2009.
Industry analysts said that if the current trend continues and if distressed homeowners would not receive any help to avoid foreclosures, the number of foreclosed homes for sale in the county would also increase by the end of 2009.
In 2007, one in every 100 Bay Area homeowners with mortgages was delinquent. Analysts said that the current mortgage delinquency projections are alarming. They explained that mortgage delinquency is an indicator of foreclosure, adding that as many homeowners miss their mortgage payments, more repossession will follow.
Analysts pointed out that the foreclosure problem will continue to haunt the housing market until the middle of next year. They believed that suburban areas will be severely affected by the foreclosure crisis in the coming months, with inner East Bay and San Francisco suffering the less.
Also, analysts projected that one in every 7 homeowners in California will be behind in mortgage payments for two months before the year ends.
They added that the projected mortgage delinquency rate of 9.45 percent in the Bay Area and 14.16 percent statewide exceeded the projected nationwide default rate of 6.93 percent.
Analysts are not seeing a bright spot in California‘s housing market for the rest of the year as they projected the state’s mortgage delinquency rate to rank the third highest in the country, behind the 16.65 percent of Nevada and 16.04 percent of Florida.
They pointed out that the mortgage delinquency rates a few years before the housing collapse was 1.6 to 2 percent.
Meanwhile, industry analysts said that the first wave of mortgage delinquencies involved borrowers of subprime loans. But this time around, analysts are seeing more missed payments made by homeowners holding prime, fixed-rate loans who lost their jobs.
They said that unemployed homeowners could not be expected to keep on paying their monthly mortgages, adding that the delinquency and foreclosure problems will remain in the Bay Area for quite a long time.
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