So how soft is the housing sector? Zillow's chief economist has the report. The bottom line: it's still soft. The tax credit for home buyers is helping lift sales but inventory supply is increasing. As CR notes:
Research has shown that once negative equity exceeds 25 percent "owners begin to default with the same propensity as investors", and it is these 4.9 million borrowers - with $656 billion in debt - that are most at risk for foreclosure.This chart on their blog sums it up; more than 10% of homeowners nationwide have negative equity at or exceeding the 25% level:
On a brighter note, the Fed's Lacker sees we're heading into a sustained recovery, although one should note that over half the uptick in April's unemployment numbers are due to the hiring of Census workers (see NYT). MaxedoutMama concurs on the economic recovery. NOFP has links to economists' opinions and charts that show the stimulus had nothing to do with the recovery.
Update: The HuffPo has an article where the nation's 2nd largest bank, JPMorgan Chase, is warning investors that underwater homeowners may walk away.
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