The group Calculated Risk posted a thought-provoking chart showing how single family mortgage delinquency rates have largely tracked changes in the U.S. unemployment rate since 2005, which we’ve excerpted. From that chart, it would appear that foreclosure activity in the U.S. is pretty closely tracking changes in the unemployment rate.
Whenever we see that kind of apparently close correlation, we go the extra mile and try to map out the relationship that would appear to exist between the two factors. We’ve presented our chart showing the correlation between the U.S. unemployment rate and the U.S. single-family mortgage 90-day delinquency rate to the left.
Running the numbers for an unemployment rate of 10%, we find that we might expect the single-family mortgage delinquency rate to increase to a level around 2.7% of all mortgages, based upon the correlation we observe in the data that appears to have existed since 2004.
Obtained from:
http://politicalcalculations.blogspot.com/2009/06/new-correlation-between-unemployment.html
Tue, Jun 30, 2009
Crisis Overview, Facts & Info