Foreclosure Sales Hit Seven-Year Low in Q2

Author: Brian Honea August 22, 2014 Share on facebookShare on twitterShare on emailShare on pinterest_shareMore Sharing Services67

Foreclosure sales are way down nationwide for the second quarter of 2014 with close to 115,000 reported, according to HOPE NOW's Q2 2014 data released earlier in the week. It was the lowest number of foreclosure sales reported for any quarter since HOPE NOW began tracking foreclosure data in 2007.

The HOPE NOW data indicates that foreclosure sales were down 9 percent from Q1, when 126,318 were reported. Year-over-year, foreclosure sales dropped 27 percent from Q2 2013's total of 157,633. This number has not declined each quarter since Q2 2013, however; for Q3 2013, the number of foreclosures increased 5.5 percent up to 166,809, and then dropped each subsequent quarter.

Foreclosure starts are down 8 percent quarter-over-quarter, falling from close to 217,000 in Q1 to about 200,000 in Q2, according to HOPE NOW. Year-over-year, the number of foreclosure starts in Q2 experienced a significant decline of 38 percent from an estimated 323,000 in Q2 2013. Though foreclosure starts have declined significantly both quarter-over-quarter and year-over-year since Q2 2013, they actually increased from May to June in 2014. In May, 66,521foreclosure starts were reported compared to 69,394 in June, a change of 4 percent.

The number of borrowers more than 60 days delinquent on their payments has declined each quarter since Q2 2013, according to HOPE NOW. The Q2 2014 total was about 1.88 million, down 5 percent from 1.99 million in Q1and down almost 15 percent from 2.21 million in Q2.

HOPE NOW research reports that more borrowers are turning to non-foreclosure solutions, such as permanent loan modifications, short sales, and deeds in lieu, to avoid foreclosing. Nearly 421,000 borrowers took advantage of various foreclosure alternatives, nearly four times the number of foreclosure sales.

Existing Home Sales Reach Highest Level Since September

Published August 21, 2014

Reuters

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  REUTERS

Americans resold their homes in July at the fastest pace in almost a year, a sign the housing market was gaining steam again after a year-long slump.

The National Association of Realtors said on Thursday existing home sales increased 2.4 percent to an annual rate of 5.15 million units.

That was above analysts' expectations and marked the fourth straight month the pace of home resales accelerated.

Home resales dropped in the summer of 2013 after the Federal Reserve signaled it would dial back its monetary stimulus for the economy, pushing mortgage interest rates higher.

The Fed, however, ended up keeping a bond-buying program running at full throttle for longer than investors expected, and mortgage rates edged lower again. This, coupled with robust job growth this year, helped push home resales in July to their highest level since September 2013.

Distressed sales, which include foreclosures and short sales, made up only 9 percent of sales last month, the lowest share since the NAR starting tracking this information in October 2008.

More homes also are being put on the market, keeping prices from rising as quickly and providing potential buyers with more choices.

The number of homes on the market for resale rose to 2.37 million in July, the highest level since August 2012 and 5.8 percent more than in July of last year.

The median sale price was $222,900, 4.9 percent higher than in July 2013.

Housing Market Maintains Spring Momentum

Author: Tory Barringer August 20, 2014 Share on facebookShare on twitterShare on emailShare on pinterest_shareMore Sharing Services39

Housing market trends kept their spring momentum in July—and are expected to remain solid in the months ahead, Realtor.com said Wednesday in its National Housing Trend Report for the month.

For the first time since the start of the housing recovery in 2012, Realtor.com says the end of the annual peak buying season passed this year without any outside economic influences creeping in.

"In July 2012 and 2013, we saw external economic factors overwhelm the healthy gains established in the housing market during the spring home buying season," said Jonathan Smoke, chief economist for Realtor.com. "This year, we're ending the traditional season with high buyer and seller confidence demonstrated by price appreciation, increases in inventory and quick home sales."

The company cited concerns of an economic crisis in the eurozone in 2012 and last year's upward trend in mortgage rates as two factors in the past that weakened consumer confidence and hurt demand for big-ticket items like homes.

According to data presented by Realtor.com, the number of homes on the market as of the end of July increased 2.3 percent compared to last year and 4.5 percent compared to the previous month, increasing to nearly 1.98 million. That improvement compares to a 6.4 percent drop in inventory recorded in July 2013 and a 14.1 percent drop the year before that.

The company attributes the uptick in housing stock to a 7.5 percent year-over-year increase in the median home listing price, bringing it up to $214,900 (a 0.1 percent decline from June) and drawing more sellers to the market.

Despite the rise in prices, buyers continue to snap up available properties at a faster pace than last year: Realtor.com reports the median age of inventory in July was 82 days, down from 85 days in 2013 and 102 days in 2012.

Smoke only expects things to improve through the rest of 2014.

"This is the first time, since the beginning of the recovery, that we expect to see positive momentum throughout the second half of the year. While seasonal patterns are emerging in July month-to-month comparisons, all other metrics point to fundamental market health and a build-up of momentum," he said.

Homebuilder Sentiment Improves in August

Published August 18, 2014

Reuters

• 
  REUTERS

U.S. homebuilder sentiment rose in August to its highest since January as labor market conditions improved, data from the National Association of Home Builders showed on Monday.

The NAHB/Wells Fargo Housing Market index rose to 55 in August from 53 in July, the group said in a statement. It was the third straight monthly gain, and topped the mean estimate of analysts polled by Reuters for a reading of 53.

Readings below 50 mean more builders view market conditions as poor than favorable.

"Each of the three components of the HMI registered consecutive gains for the past three months, which is a positive sign that builder confidence appears to be firming following an uneven spring," said NAHB Chief Economist David Crowe. "Factors contributing to this rise include sustained job growth, historically low mortgage rates and affordable home prices, which are helping to unleash pent-up demand."

The single-family home sales component rose to 58 from a revised 56 and was also the highest reading since January. The gauge of single-family sales expectations for the next six months rose to 65, the highest since August 2013, while prospective buyer traffic rose from 39 to 42, the highest since December.

Home Prices Rise but Show Signs of Slowing

Author: Scott Morgan August 15, 2014

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According to the latest Residential Price Index report from FNC, home prices are still on the way up, just not at the pace they used to be.

FNC found that despite continued signs of leveling off in home price appreciation, U.S. home prices were up another 0.8 percent from May to June and 2.3 percent throughout the second quarter.

According to FNC, whose data excludes distressed properties, year-over-year growth is decelerating as expected. The rate of growth in price appreciation is down to 8 percent; in February, the rate was at 9.4 percent.

FNC expects July home prices to also trend upward, thanks to record lows in the number of mortgage defaults and foreclosures, favorable mortgage rates, and continued job growth.

This snapshot of the market jibes, mostly, with a recent report from the National Association of Realtors, which found that while home prices are slowly rising in 71 percent of the metro markets it studied, the numbers reflect a slowdown from the first quarter, when prices rose in 74 percent of metros and 37 areas saw gains higher than 10 percent. This, according to NAR, brings national year-over-year appreciation to its slowest pace since the beginning of the housing recovery.

According to NAR's released report, which does include foreclosures and short sales, the median existing single-family home price across April, May, and June nationally was up 4.4 percent from a year ago. That rate of growth was about half the gain recorded in the first quarter.

FNC studied the 100 top metros for its latest index and found that on a quarterly basis, prices increased faster during the second quarter than the first. On a year-over-year basis, "the indices continue to exhibit moderating growth," according to the report.

Prices were up from May to June in most markets, though Washington D.C., Phoenix, San Antonio, and St. Louis showed a negative month-to-month change.

Sacramento, New York, and Charlotte show the largest price gains during the month—1.9 percent, 1.7 percent, and 1.7 percent respectively. This is the second consecutive month that Sacramento and Charlotte saw a sizeable month-to-month price increase.

On a year-over-year basis, Sacramento, Riverside, and Miami led national growth, each showing double-digit price gains amid a notable slowdown in the annual rate of price appreciation across much of the country, the report stated. . The Cincinnati, St. Louis, and Cleveland markets largely remain outliers, and their latest numbers (from June) continue to point to weakening prices year-over-year.

3 Things Homebuyers Should Know, But Don’t

Published August 07, 2014 

Credit.com

Buying property, no matter how many times you do it, will be among the biggest financial decisions you make. While it’s difficult to feel fully prepared for the mortgage process, you have to do as much research as possible to ensure you’re entering into an affordable loan agreement, but many homebuyers start the process surprisingly unprepared to make this massive monetary commitment.

A majority of consumers are confident in their ability to afford a mortgage and buy a desirable property, according to a new survey of 1,037 prospective homebuyers commissioned by Discover Home Loans. The data is based on interviews conducted by Versta Research between March 24 and April 4, with a margin of error of plus or minus 3 percentage points.

The survey found a disparity between people’s perceived and actual preparedness for buying a home, particularly when it came to the monthly impact on their budgets. Of those surveyed, 83% said they had been pre-qualified for a home loan, but they were a little hazy on the details of a home loan.

1. How Large Their Down Payment Will Be

The down payment you put on a property has a large impact on various aspects of a mortgage. A small down payment may require you to pay for private mortgage insurance (PMI), a higher interest rate and a higher share of closing costs. It may also be more difficult to obtain a loan at all if you have little to put down on the property.

Despite the importance of the down payment, 41% of those surveyed had not yet calculated it. It’s pretty difficult to accurately project your mortgage costs if you don’t know what you can afford in terms of a down payment. Here’s how to calculate your future down payment on a home.

2. How Much Their Monthly Mortgage Payment Will Cost

You need to know how buying a home will impact your monthly budget, so it’s a best practice to calculate your monthly mortgage payment before agreeing to the loan: 48% of prospective homebuyers haven’t done it.

You must make your mortgage payment — there’s no dancing around that fact. If you pay late, you’ll get dinged with fees, and if you go more than 30 days past due, your credit standing will take a huge hit. One late payment can shave 100 points off your credit score, which will hinder your access to other forms of credit and how much you pay in interest on other loans.

3. How a Mortgage Will Impact Their Finances

Mortgages aren’t exactly easy to understand, but it’s important to wrap your head around the complexity of a home loan before you take one out. Nearly two-thirds of those surveyed said they feel overwhelmed by the amount of information they receive about the financing process, and among borrowers younger than 30, 76% report feeling overwhelmed.

Confusion is understandably more common among first-time buyers (76%), but even people who have taken out a mortgage before say they’re overwhelmed: 54% of experienced homebuyers find themselves stressed and confused when trying to grasp the details of their mortgages.

That’s OK, as long as the confusion is resolved by closing. That means asking your lender and real estate agent a lot of questions and making sure you have a clear understanding of the loan agreement.

Taking out a home loan will have a huge impact on your credit standing, and if you struggle to meet your mortgage obligations, you will see your credit standing collapse. While you can recover from home loan problems, it may take years to repair credit damage, and it probably won’t be easy to turn things around. Before you apply for a mortgage, check your credit scores. Monitor your score throughout the application process and life of the loan to make sure you’re doing everything you can to keep your credit in decent shape. You can see your credit scores for free through Credit.com, with updates on your credit data every 30 days.

Survey: ATR, QM Aren’t Majorly Impacting Prime Mortgage Market

Author: Krista Franks Brock August 6, 2014

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The ability-to-repay and qualified mortgage (QM) rules that went into effect earlier this year are not having a significant impact on approvals of prime conforming residential mortgage loans, but they are impacting the jumbo and nontraditional loan markets, according to the July 2014 Senior Loan Officer Opinion Survey on Bank Lending Practices conducted by the Federal Reserve.

Meanwhile, the Fed reports, credit standards continue to ease at major lending institutions.

Most large banks reported that because of the safe harbor for loans that meet GSE standards, the ability-to-repay/QM guidelines are not having a major impact on their approval rates for prime, conforming loans. However, "a more substantial share of other respondents" reported their approval ratings are lower due to the new industry rules.

While 77.8 percent of large bank respondents said their approval ratings for prime residential mortgages is "about the same" as it would be without the new rules, 47.1 percent of other banks said the same is true at their institutions.

In particular, jumbo loans and nontraditional are being impacted by the new rules, according to the Fed's survey results. More than half of survey respondents said these two types of loans are at least "somewhat lower" than they would be without the new rules.

The two pieces of the ability-to-repay and QM rules that are most impacting approval rates, according to the Fed, are the mandatory assessment of credit history, assets, and debt payments; and the debt-to-income ratio cap of 43 percent.

Overall, banks reported easing credit standards for residential home loans. However, standards for nontraditional loans and home equity lines of credit (HELOCs) remained about the same.

Many banks also reported that despite easing credit standards, their standards remain stricter than their institution's long-term average.

Demand for residential loans increased for the first time in one year, and demand for HELOCs increased for the first time since October 2013, according to the Fed's survey.

Credit standards for commercial real estate loans is also easing at most banks and are now below their long-term average standards at some institutions, according to the Fed.

CoreLogic: Falling Foreclosure Inventory in June

Author: Cody Galuardi July 31, 2014Share on facebook

CoreLogic published its monthly National Foreclosure Report with data from June 2014, which indicates that foreclosure inventory is down 35 percent from June last year. Foreclosures fell from 54,000 to 49,000 on a year-over-year basis.

The report further indicated that foreclosure inventory in the United States shrank for 17 consecutive months as of June 2014 and fell below 650,000 homes by the end of that month, but the month-over-month rate of decline in inventory is not expected to last.

Mark Fleming, the chief economist for CoreLogic, commented that the current state of national foreclosures is not entirely positive, though there are certainly some positive trends: "While 32 straight months of year-over-year decline in the foreclosure rate is cause for celebration, the total number of homes still in the foreclosure process remains almost four times as high as the average in the early 2000s."

There are some concerns that the foreclosure inventory will soon dwindle down to the foreclosures that are the most difficult to complete, namely those in judicial states where the foreclosure processes are complex and lengthy.

States with the greatest inventories were New Jersey, Florida, New York, Hawaii, and Maine, while states with the highest number of completed foreclosures in the year ending in June were Florida, Michigan, Texas, California, and Georgia. The states with high inventory are outliers in the current state of foreclosures, as "Most of the U.S. has reduced its shadow inventory to pre-recession levels," according to Anand Nallathambi, president and CEO of CoreLogic.

Completed foreclosures did rise 2.7 percent month-over-month up from 48,000 in May, a number that is still more than double the national average from before the financial crisis. Nationwide, CoreLogic found that 648,000 houses were in a stage of foreclosure as of June 2014, and that 596,554 foreclosures were completed in the twelve months ending this past June. If concerns about lingering foreclosure inventories prove true, it may be several years yet before the national inventory shrinks back to pre-recession levels.