This article is the first one I have seen to cite unemployment as a driver of foreclosure. I always said that the economy was completely whacked because people with jobs were losing their houses. Now that unemployed people have Alt-A and sub-prime loans, things will get interesting in the fall or next fall. It takes a year for the bank to foreclose on a house.

Historical home price to income ratios shows that prices should be near the bottom, but there is still a large supply and questionable “real” demand. Not many move upper in this market, and how many people have money in the bank?