Reporting Joe Mathieu
BOSTON (CBS) – We keep hearing about a strong rebound in the housing market. New data are confirming that every week.
Home prices rising. Inventories falling. Glory days are here again.
But there’s a dirty little secret behind this recovery – big banks see an opportunity to get some of their money back.
The Mortgage Bankers Association says foreclosures are back on the rise. In fact, bank repossessions of homes rose 11-percent in May compared to the month earlier. Default notices were also higher.
And researchers explain this is happening for the very same reason that you’ve been feeling good about things – rising prices.
In this case, we need to think of banks as homeowners. Really big ones. And they want to unload troubled properties in a strong market after sitting on them for years.
Rising prices give them a chance to do that without losing as much money.
But of course foreclosures hurt home prices. And that could slow the housing recovery.
And the wheel goes ‘round.
Unfortunately this trend is not the only storm cloud hanging over the market.
Just look at mortgage rates. They’re already on the rise, topping 4-percent in the latest week for the first time in more than a year.
And economists fear they could keep rising.
That’s due to a belief that the Federal Reserve is about to slow or even end its stimulus programs that have kept interest rates near record lows for several years.
That same fear has been causing more volatility on Wall Street as well. Everyone is worried about what happens when the Fed takes the training wheels off.
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