1 in 8 homeowners behind on mortgage payments
In March of 2007, the sky-is-not-falling crowd was screaming "Relax! More than 95% of people are current on their mortgages!" In the first quarter of 2008, it was "Sure it's bad, but 92% of people are still up to date on their house payments!"
Now that one in eight people are behind on their mortgages, the "it's not so bad" crowd seems to have quieted down a bit -- we're below 90% and "Relax! 88% of people aren't living in a house of pain!" just doesn't have the same ring to it. It's the highest delinquency rate since 1972.
But here's the reason that we should relax: Every time someone falls behind on payments and loses a home, the house is put on the market and the excess inventory has been driving down home prices for the past two years. Every single foreclosure results in an opportunity for someone else to buy a home. Maybe that's a first-time buyer and maybe it's an investor -- whose contribution to the rental housing stock will help keep rentals affordable.
It's not the nicest way for it to happen, but the point is that doors are opening and doors are closing in our economy. Many people will make a lot of money buying real estate at currently distressed prices, and many first-time buyers will make the best investment of their lives.