Man I hope that these folks are not accurate. I would expect market forces to come into play way before the results of the Pew Research report on housing would occur.
One in 33 current U.S. homeowners may be headed toward foreclosure in the coming years because of subprime loans, according to our new report, Defaulting on the Dream. In some states, the crisis is particularly acute—in Arizona, for instance, one in every 18 homeowners could lose their home; in Nevada, the ratio is one in 11.
The problem hardly stops there. Because of foreclosures in their communities, an additional 40 million homeowners may see their property values and their municipalities’ tax bases drop by as much as $356 billion in the next two years. Nearly every state is affected: in 47 states and Washington, D.C. the number of mortgage loans entering foreclosure as of December 2007 had increased by at least 20 percent since December 2006. Ten states alone could lose a total of $6.6 billion in tax revenue in 2008, according to a recent analysis by the firm Global Insight.
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I would not be surprised to see them right on the money. I can't tell you how many people here (Minneapolis) are barely hanging on… but haven't missed a payment yet.
I feel like that we are only 3/4 of the way through the subprime crisis. Personally, I feel that things are going to get worse before they get better. The best way to solve the problem is to make the lenders that made the loans keep the subprime loan for the life of the loan. This would make the lender think a little harder about loaning on questionable credit.