Despite increasing mortgage delinquency and foreclosure rates in California, the state's median home price shot up 4.8 percent to $591,180 during the year-over-year period ended in May, according to the CALIFORNIA ASSOCIATION OF REALTORS®. A recent report from the Mortgage Bankers Association showed a subprime delinquency rate of 7.5 percent, versus a prime delinquency rate of 1.22 percent for adjustable-rate mortgages, in California during the first quarter.
University of California-Los Angeles Anderson Forecast economist Ryan Ratcliff believes job gains in the professional services sector could prevent a recession, provided that the state - which the California Association of Mortgage Brokers says accounts for 48 percent of home loans nationwide - is not hit too hard by problems in the subprime market.
Following years of rapid home-price appreciation, PMI Group Inc. Chief Risk Officer Mark Milner says Los Angeles, Santa Ana, Oakland, Sacramento, and San Diego have a more than 50-percent chance of price drops in the coming years.
Source: American Banker, Kate Berry and Harry Terris (06/28/07)
