18 percent of mortgaged homes nationwide are now upside-down, according to a report released today by First American CoreLogic, an affiliate of title insurance and real estate services company First American Corp. 64 percent of those homes were in seven hard hit states: Arizona, California, Florida, Georgia, Michigan, Nevada and Ohio. According to a Reuters article:

...states with large numbers of homes with negative equity either had
rapid price appreciation, many homes bought with subprime mortgages or as
speculative investments, steep manufacturing declines, or a
combination.

Nevada was hardest hit, where mortgage borrowers on average owed 89
percent of what their homes were worth, and 48 percent had negative equity.
Michigan was second, with an 85 percent loan-to-value ratio and 39 percent of
borrowers underwater.

David Wyss, chief economist at Standard & Poor's, predicts that home prices nationwide will fall another 10 percent before bottoming late next year, according to a Reuters article. He states, "Things seem to be stabilizing in Michigan, but the big bubble states—Florida, California, Arizona and Nevada—are still very overpriced." He also believes that though New York fared best in the report with only 4.4 percent of homeowners with negative equity, the state is still at risk the economy slows and leaves less money for housing.

Other experts go further by predicting the worst U.S. recession since the early 1980s. All 20 MSAs measured by the S&P/Case-Shiller Home Price Indices saw home prices decline between August 2007 and August 2008. In Q3 of 2008, foreclosures rose 71 percent to a record 765,558, according to RealtyTrac. The Commerce Department said the U.S. GDP fell at a 0.3 percent rate in Q3, according to Reuters.

Recent bank rescue plans have yet to spur lending and ease mortgage rates. This week, the rate on a 30-year fixed-rate mortgage jumped almost half a percentage point to 6.46 percent according to Freddie Mac. In addition, borrowing costs on adjustable-rate mortgages are expected to rise in the coming months. According to the Reuters article, "Last week, Wachovia Corp said borrowers with its "Pick-a-Pay" ARMs and living in or near Stockton and Merced, California, owed at least 55 percent more on their mortgages, on average, than their homes were worth."

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Labels: Foreclosures, housing crisis, mortgage crisis, U.S. Cities

As summer rapidly approaches, millions of college students are preparing to graduate and find their first "real world" jobs. (Few of them will likely be actually working for "The Real World.")

Philadelphia topped a recent list of the top 10 most affordable cities for grads. The list was compiled based on research from Apartments.com and CBCampus.com, which is part of CareerBuilder.

"Joey Hyde, a 25-year old physics grad student at the University of Pennsylvania, likes living in downtown Philadelphia because he can get around without a car, make spontaneous plans with friends or his fiancée for a night on the town, and enjoy a great meal at his favorite upscale Cuban restaurant for half of what it would cost in Manhattan," according to MSNBC.

"Frontrunner Philadelphia, along with other cities on the list, has been working to enhance its reputation among younger workers and prevent the 'brain drain' that happens when young adults graduate and leave," according to MSNBC.

For more on this phenomenon, see our article on the Top 5 Declining U.S. Markets.

Research criteria for each city included "the population of people age 20 to 24, the number of entry-level job openings suitable for new grads, and the average cost to rent a one-bedroom apartment," according to MSNBC.

The rest of the list included, in order from second through tenth: Boston, New York, Phoenix, Chicago, Dallas-Fort Worth, Los Angeles, Houston, Detroit and Atlanta.

New York was the most expensive city on the list in terms of the average rent for a one-bedroom apartment, which is $1,520 per month. Detroit featured the cheapest rental rate for a one-bedroom apartment at $699 monthly.

Labels: U.S. Cities, Young Workers

"All my exes live in Texas, and Texas is a place I'd dearly love to be," goes the chorus of an old George Strait song. Well, based on numbers released by the U.S. Census Bureau, a lot of people now have exes who live in Texas.

Between July 2006 and July 2007, about one in six Americans who moved out of state moved to Texas.

"16 percent of Americans who moved to other states between July 2006 and July 2007 came to Texas, which led the nation for the second straight year in that category," according to the AP.

"Four Texas metropolitan areas were among the biggest population gainers as Americans continued their trend of moving to the Sun Belt in 2006 and 2007," according to the Associated Press.

Dallas-Fort Worth saw 162,000 new residents come to the area in that time period--more than any other metropolitan area. Houston, Austin and San Antonio were also among the top 10 metropolitan areas in terms of population gain. Houston was fourth, Austin was eighth and San Antonio was tenth.

Atlanta, Phoenix, Riverside, Calif., Charlotte, N.C., Chicago and Las Vegas comprised the rest of the top 10.

"Of the 50 fastest-growing metro areas, 27 were in the South and 20 were in the West. Two were in the Midwest, one—Fayetteville, Ark.—straddles the South and Midwest and none was in the Northeast," according to the AP.

For more information on the migration to the Sun Belt, see our article Sun Belt Luring Young Workers.

All of the people moving to these areas had to move from somewhere, and many locations across the U.S. saw their populations decline. "Detroit lost more than three times as many people as any other metro area — its population declined more than 27,300. Other areas losing more than 5,000 people were Pittsburgh, Cleveland, Columbus, Ga., Youngstown, Ohio, and Buffalo, N.Y.," according to the AP.

Detroit, Buffalo and Pittsburgh all made NuWire's list of the Top 5 Declining U.S. Markets.

For more information on population shifts in the U.S., see NuWire's Population Growth Table From 2000-2006.

Labels: Population Growth, U.S. Cities