Has the subprime mortgage meltdown been overhyped?

It is rare to turn on CNBC or watch the nightly news and not hear something about the subprime mortgage meltdown. Is this for real or has it been overhyped? This would not be the first time the media sensationalizes something to generate more ad revenue. The constant chatter sells more papers and makes more people tune in to the nightly news.

According an article from Fox News there are 44 million mortgages in the United States. Less than 14% of those mortgage are subprime. Only 13% of the subprime mortgages are late on the payments, with the majority of late payers working through their problems with the banks.

If you work through all of the knitty gritty details only about 0.6% of U.S. mortgages are in foreclosures. That’s up slightly from roughly 0.5 percent last year. That’s all.

More interesting statistics:

There are approximately 254,000 mortgages in foreclosure at the moment in the U.S.  This is up about 219,000 from last year. The "subprime mortgage meltdown" has given us an increase of 35,000 mortgage foreclosures over the last quarter. The average subprime mortgage is almost exactly $200,000.  That means approximately a $7 billion increase in foreclosed value in the first quarter of this year.

So how big is the household net worth of the United States? $53,000,000,000,000. That is $53 trillion. In other words, the recent increase in subprime foreclosures amounts to 0.01 percent of net U.S. household wealth.

Assuming Fox News numbers are accurate I would say this "subprime mortgage meltdown" has been OVERHYPED. What do you think?