HomeBuyerInstitute reports that the three biggest problems for the U.S. housing market are (1) excess inventory, (2) elevated unemployment and (3) tighter lending restrictions. Their report shows the inventory of bank-owned properties have the most impact on home prices. A report by Laurie Goodman, a mortgage and housing analyst with Amherst Securities,  showed bank-owned properties rose from 2 million units in 2009 to some 3.35 million today. The average time to process a foreclosure has moved up to 400 days, or 2 months longer than the first quarter of 2010. These properties are often sold below market values, placing downward pressure on home prices. The sheer number of homes and how they are sold are harming the broader housing market. Radar Logic CEO Michael Feder says it could be five years before demand catches up with supply. This could be a thorn in the side of housing for years. Thus clearing bank owned inventory is a must for housing recovery.

(photo credit: Home Buyer Institute)