Shadow Supply Of Real Estate May Push Back Housing Revival

Bank-owned homes typically don't show up in headline figures, nor do ailing borrowers who are still in their homes or owners who want to sell but are waiting in hopes the market will improve. Yet this shadow supply of real and potential homes for sale is large and growing, pushing back a housing recovery, industry figures say. Officially, 4.55 million existing homes were for sale in April, says the National Association of Realtors. At the current low sales pace, it would take 11.2 months to clear that inventory, well above the 3.6 months at the start of 2005. That hefty supply reflects what's found on traditional multiple listings services. But a lot more lurks. A record 2.47% of all home loans were in the foreclosure process at the end of the first quarter vs. 1.28% a year earlier, the Mortgage Bankers Association said Thursday. Beyond that, 6.35% of all loans on one-to-four-unit residential properties are behind on payments. That's the highest delinquency rate since the MBA survey began in 1979. Nearly one-quarter of subprime adjustable-rate loans were seriously delinquent.

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