The diary by bobswern is pretty detailed and has many linked sources, but sometimes that is too much.
Some people don't have the time to read all those articles. For those people there are charts. Lots of them.
First of all, let's agree what a "healthy" housing market looks like.
Traditionally it is: Young households take out mortgages and become first-time homebuyers. More established households, that may or may not have paid off their mortgages, sell these small homes and move into larger, more expensive homes.
This is not what is happening today.
Even those lucky enough to get mortgages are encountering the exact same abuses we saw during the recent housing bubble.
Despite extensive federal subsidies, the housing market continues to flounder.
It's because large, Wall Street investors are buying, and they are doing it with cash.
The speculators are back.
53% of home sales in January were either by all-cash buyers or "flippers". Seven out of ten investors paid cash.
This means fewer homeowners and higher rents.
Investors are buying, not homeowners, and that makes a huge difference.
Homeowners never sell, except to buy another home.
Investors always sell, and they always sell to buy a different product.
The housing "recovery" isn't a normal housing rebound. It is an investment rebound, and thus it will follow the laws of an investment cycle, like the stock market.
That means after it goes up, it will go down. It's only a matter of time.
Investors buying NPLs to increase their rental portfolios is a cause for alarm because they stand to profit by pushing people out of their homes, said Kevin Stein, associate director of the California Reinvestment Coalition, a San Francisco-based tenant and consumer advocacy group....
Brien said an estimated 30 percent to 50 percent of the NPLs will end up as rentals for the company. In other cases, the borrowers will resume paying the loans after a modification or the homes will be sold because the location or quality doesn’t match Starwood Waypoint’s criteria.
“We’re always going to take the outcome that’s most economically beneficial,” Brien said.