Jobless Homeowners: More Foreclosed Houses for Sale
June 12th, 2009 by 
Joseph Smith
The continued rise in number of unemployed Americans in May corresponded to the continued rise in foreclosed houses for sale in May, based on reports released by various entities this week.
The number of Americans who claimed unemployment benefits in the week ended May 30 surpassed the 6.8 million level, based on data released by the Labor Department this week. The number also corresponded to the increase in number of foreclosure notices and foreclosed houses for sale.
The figure does not include around 2.4 million Americans getting unemployment benefits through government extension programs that usually extend the 26-week period in many states by more than 50 weeks.
If the extension programs are included in the estimates, approximately 8.5 million Americans received jobless benefits in the last week of May.
An analyst said the unemployment situation continues to be a major factor in the relatively low level of consumer spending and the large numbers of bank foreclosures for sale.
The nationwide jobless rate soared in May to 9.4 percent, the highest rate reached in 25 years, after 345,000 jobs were slashed by employers. Some economists said that the unemployment rate could approach the 11 percent level in 2010. With this record rate of jobless Americans, more foreclosed houses for sale are expected.
Nevertheless, there was one positive data related to unemployment last week. The number of new unemployment claims dropped to an adjusted figure of 601,000, the lowest number since January and lower than analysts’ expectations.
The large rise in the number of jobless claims and the decline in new unemployment claims indicate that many companies have not been hiring.
Additionally, the decline in home values, stock prices and job numbers will continue to push down consumer spending levels. This fact makes analysts conclude that economic recovery would be slow because consumer spending, which powers the major part of the economy, is declining.
Economists and other analysts expect job losses to increase foreclosures, as lack of income, and not subprime mortgages, has become the main reason for failure to make monthly loan payments. Foreclosures are expected to continue their upward direction until 2010.
Nationwide in May, a total of 321,480 housing units received foreclosure notices. Included in the total are 65,017 units which are already counted as foreclosed houses for sale.
