US Housing After the Tax Credit Expiration

The MBA has released two troubling updates on the state of the housing market. A record 14.69% of mortgage loans were either one payment delinquent or in the foreclosure process in the first quarter of 2010. As if that weren't enough to send you to the ledge, mortgage purchase applications plummeted to a 13-year low. Purchase applications fell 27% last week and have declined nearly 20% over the past month, this despite very low interest rates. Clearly the expiration of the tax credit has had a significant impact on would-be purchasers. With the administration's HAMP program stalling, somebody's going to have to come up with some more creative ways to pump up housing. The alternative? Face the inevitable economic outcome that the only way to a market clearing price is through supply and demand.