A number to ponder: 11.5% of home mortgages in ‘default’; can the ad recovery last in this environment?
About three years ago my family went with another on a short ski vacation. During one dinner out the conversation turned to the economy. I mentioned that I had just read that nearly five percent of all U.S. household were now in default on the home mortgages. I went to great pains to explain that “default” meant they were late on a recent payment, not that they were about to be foreclosed on.
Nonetheless, the comment caused one of the people at the table to get upset. Apparently the person felt I made up the number and was trying to makes some political point — no, I was merely passing on what I had heard recently.
That was early 2008. Today the NYT, low in a story on banks, reports that “11.5 percent of borrowers are in default today, up from 5.7 percent from two years earlier.”
Ponder that number for a moment: more than one in ten households are currently in default on their home mortgage.
But it gets worse: RealtyTrac reports that 102,134 properties last month were taken over by the lender. And according to Bloomberg, there were 347,420 foreclosure filings just last month, “one out of every 371 households received a notice.” California led the way: 191,016 homes received a foreclosure filing last month.
The media industry does not live in a vacuum, these kinds of economic numbers must have an impact on the industry through advertising volume and subscription renewal rates. The publishing industry is currently showing signs of a modest adrecovery — a little better for online advertising — but how long can it last?