WASHINGTON — The jobs crisis is putting more Americans at risk of losing their homes.
One in 10 households has missed at least one mortgage payment, and more than 2 million homes have been repossessed since the recession began. Few expect the outlook to improve until companies start to hire steadily again and layoffs ease.
And while there was some good news Thursday – a modest decrease in the number of Americans filing for jobless benefits for the first time in a month – the figure is still too high to bring down the unemployment rate.
So the housing crisis goes on, even though the average rate on a 30-year mortgage fell again this week to an all-time low of 4.36 percent.
"Ultimately, the housing story, whether it is delinquencies, homes sales or housing starts, is an employment story," said Jay Brinkmann, the top economist for the Mortgage Bankers Association.
It's just one of the problems confronting Federal Reserve chief Ben Bernanke as he speaks Friday at a closely watched conference in Jackson Hole, Wyo. The Fed has mostly exhausted its ammo to give the economy a jolt.
Just under 10 percent of homeowners are delinquent on at least one mortgage payment as of June 30, according to a quarterly report on delinquencies released by Brinkmann's trade group. That's more than double the level before the recession.
The percentage of mortgage borrowers receiving foreclosure notices did fall slightly from the previous quarter, the first drop in four years. And the percentage of loans receiving their first notice of foreclosure also dipped.
But many experts say the situation is getting worse. July was the worst month on record for new home sales and the worst in 15 years for sales of previously occupied homes.
The supply of unsold homes on the market keeps getting bigger. At the same time, the growing number of foreclosures keeps pushing down home prices and scaring potential buyers and sellers from the market.
More than 2.3 million homes have been repossessed by lenders since the recession began in December 2007, according to foreclosure listing service RealtyTrac Inc. And 6 million more will be lost to foreclosure over the next three years, by some estimates.
If that happens, home prices will probably sink further, and the economy will suffer. Builders will keep construction to a minimum, and Americans will be less willing to spend because of their lost home values.
"Housing is certainly not going to help the recovery," said Michelle Meyer, a Bank of America economist. "It threatens to hinder it."
A major problem is that many people have homes that are now worth less than they owe on their mortgages. Approximately 11 million homeowners, or 23 percent of those with a mortgage, were "underwater" as of the end of June, real estate data provider CoreLogic reported Thursday. Nevada had the highest number of any state, with 68 percent.
The number of "underwater" mortgages was down from the previous quarter – but only because homes are being repossessed by lenders.
The number of Americans missing payments and falling into foreclosure has gone up along with unemployment. The jobless rate has remained near double digits all year.
First-time requests for unemployment benefits fell last week to a seasonally adjusted 473,000. It was the first decline in a month and came one week after the number hit the half-million mark – the highest level in nine months.
Even with last week's decline, though, the four-week average in unemployment claims, which evens out the week-to-week volatility, rose to 486,750, the most since November 2009. In a healthy economy that number is more like 400,000.
Losing a job or having health problems that lead to high medical bills are among the reasons many people fall behind in their mortgage payments.
Toni Cloyd experienced both and fell behind twice on her monthly mortgage payment of $2,200 – first in 2006 after undergoing surgery and again in 2008 after she lost a job and was out of work for six months.
The Denver woman says she tried to catch up. She enrolled in the Obama administration's main program to help homeowners at risk of foreclosure by lowering their monthly payments. She says she made payments that were never applied, and the bank is still demanding $98,000 in missed payments, lawyer's bills and late fees.
Bank of America says she never provided proper documents and was not approved for the mortgage modification.
The end result came earlier this month. She pulled into the driveway and was embarrassed to find a foreclosure notice tacked to her door.
"It makes us appear to be deadbeats," she said. "We've done everything that we possibly could to resolve this."
Like Cloyd, nearly half of the 1.3 million homeowners who have enrolled in Obama administration program have been cut loose through July, the Treasury Department said last week. The program is intended to help those at risk of foreclosure by lowering their monthly mortgage payments.
AP Real Estate Writers J.W. Elphinstone in New York and Alex Veiga in Los Angeles contributed to this report.