According to a report released by Fitch Research today, as many as 75% of the homeowners who modified their home loans through the Home Affordable Modification Program (HAMP) and other loan modification programs will be in default again within the next 12 months. While this may have been anticipated by those who understand that many of the homeowners’ debt woes went far beyond the homes they owned, it seemed to still dampen investor’s spirits on Wednesday as the Dow Jones Industrial Average struggled to gain a modest 4.69 point gain to close at 10,409.46.
Adding to the disappointing housing market developments was the news that the sector had reached a 40-year low in unsold homes in May and that the number of building permits issued dropped 5.9%. This is not necessarily a surprise since the home buying tax credits that had helped to create a false sense of security in early 2010 housing sector statistics expired in April.
European and Asian markets closed up again on Wednesday, which seems to reflect an easing of investor concern over the European debt crisis. The S&P 500 closed at 1,114.61, down .62 points and the Nasdaq closed up .05 points at 2,305.93.
