Home Foreclosures Skyrocket

The number of U.S. homes entering foreclosure in the first three months of 2007 doubled from the same period last year, adding just one more item to the long list of omens plaguing the mortgage market. Lenders filed for foreclosure on 168,829 homes in the first quarter, according to research firm Foreclosures.com, up from 83,154 last year.

It's all part of the domino effect that's afflicted the housing market for the past several months. Mortgage payment delinquencies are at a four-year high and subprime mortgage companies, such as now-bankrupt New Century, are dropping like flies. As a result, credit has become much less available to homeowners with poor credit histories.

According to Foreclosures.com, the hardest hit county nationwide was Riverside County in California. Other locales feeling worse than usual foreclosure pain are Cook County in Illinois, Miami-Dade County in Florida, Clark County in Nevada, and Los Angeles County in California.

It's hardly surprising, then, to hear that homebuilders are feeling pessimistic. The National Association of Homebuilders announced on Monday that confidence fell to the lowest levels of the year, based on a monthly survey of U.S. homebuilders. The index fell from 36 to 33, dipping lower than was expected. Any reading below 50 is considered "poor." Homebuilders have lost heart due to sluggish single family home sales and high inventories, in addition to the rising subprime mortgage defaults leading lenders to tighten their standards.

Housing starts, which reflects the number of new residential construction projects, will be announced on Tuesday, but the N.A.H.B. has already lowered its forecast to 1.44 million from 1.65 million.

by Liz Gunnison