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Mortgage delinquencies improve very slowly

This recovery has been slow, and agonizingly slow for all those exposed to the real estate market. The top chart shows mortgage delinquencies as a % of total loans, while the bottom chart shows foreclosures as a % of total loans. Both reached record-high levels early this year. There's been some progress since then, but we still have a long way to go before the real estate market gets back to anything that might be considered normal. Lots of pain and suffering out there, and it's going to be a hard slog for at least the next year or two, even though it is nice to see that we have turned the corner and are moving in the right direction.

If there is any consolation to be found here, it is that this problem (record-high delinquencies and foreclosures) has been with us for quite some time now, and the market has had plenty of time to adjust prices and take losses. It is very likely that all the losses that are going to come out of the real estate market have already been priced in, and all the bad news has been digested. Undoubtedly there are many homeowners who haven't yet accepted the fact that they have lost lots of equity in their homes, but the market has most likely figured it out by now. The worst is over, and now the economy and the market can slowly put things back together.

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