The available supply of foreclosures and short sales previously stunted the recovery for new home sales, according to CoreLogic’s May report. Though, now that the supply of distressed homes and existing-homes for sale has fallen, there’s more room for the new home sales market to expand.

According to CoreLogic, the number of seriously delinquent mortgages (90-plus delinquencies, including foreclosures and REOs), peaked at 3.7 million in January 2010, but has fallen by 1.2 million, or by 33 percent.

As delinquencies decline, new home sales are rebounding after hitting low points over recent years. Citing data from the Census Bureau, CoreLogic reported new home sales have increased 19 percent from a year ago in March.

Improvements in the new home sales market also benefits the economy in several ways since new homes require the acquisition and development of new land, the purchase of supplies, and the need for labor.

According to the report, every new home requires five full-time jobs for 12 months. (DSN)

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The number of residential properties lost to foreclosure increased from February to March, while inventory was down from month and year ago levels, according to data from CoreLogic.

In its most recent foreclosure report, the data provider reported 55,000 homes were lost to foreclosure in March, up 6 percent from 52,000 completed foreclosures in February. Still, completed foreclosures stood 16 percent lower compared to the year ago level when 66,000 homes were lost to the process.

“In March, completed foreclosures were down 52 percent from the peak in 2010, and almost all of the top 100 major metropolitan areas have declining foreclosure rates,” said Dr. Mark Fleming, chief economist for CoreLogic.

While completed foreclosures have been on the decline, they still remain elevated. Between 2000 and 2006, completed foreclosures averaged 21,000 per month, data from CoreLogic revealed. Since the financial crisis began in September 2008, about 4.2 million homes have been lost to foreclosure.

CoreLogic also reported the number of homes in foreclosure inventory stood at 1.1 million, down 23 percent from March 2012 and down 1.9 percent from February.

“For 17 consecutive months, foreclosures have declined year over year across the U.S,” said Anand Nallathambi, president and CEO of CoreLogic. “Although we still have more than a million homes in some stage of foreclosure, this trend, combined with rising home prices, is another signal of a gradually improving housing market.”

“The foreclosure rate nationally is down 23 percent relative to a year ago, signaling continued reduction in the stock of distressed assets,” Fleming noted. (DSNEWS)

August home prices across the United States were up an average 4.6 percent since the start of the year, according to data from Lender Processing Services.

LPS’ Home Price Index, which reflects transacted sales rather than recorded sales, revealed that the average U.S. home price increased to $205,000 in August, up 0.2 percent from July. The average home price in August 2011 was $199,000, or 2.6 percent less than this year’s reading. The most recent price increase brings the HPI up 4.6 percent from January 2012.

The current cycle’s price peak was $266,000, recorded in June 2006.

Minnesota and Michigan led all states in month-over-month price gains, reaching growth of more than one percent. Minnesota saw 1.2 percent improvement from July, while Michigan prices increased 1.1 percent.

Connecticut fared the worst out of the 20 states in the report, reporting -3.7 percent price growth. Illinois followed with -2.4 percent. (LPS, DSN)

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Home prices continued to trend upwards in August, posting both yearly and monthly gains for the sixth consecutive month, CoreLogic reported Tuesday.

When including distressed sales, home prices in August rose 4.6 percent from a year ago, marking the biggest yearly gain since July 2006. Month-over-month, prices were up 0.3 percent from July to August.

When excluding distressed sales, which are short sales and REO transactions, prices were up yearly and monthly by 4.9 percent and 1 percent, respectively.

CoreLogic’s Pending HPI points to further increases into September. Prices including distressed sales are expected to rise by 5 percent yearly and 0.3 percent monthly.

“Sustained economic recovery in the U.S. requires a healthy housing market. You cannot have a healthy housing market without price stabilization and ultimately home price appreciation,” said Anand Nallathambi, president and CEO of CoreLogic, in a release. “Improving pricing trends over the past few months and our forecast for continued gains in September bode well for a progressive rebound in the residential housing market.” (DSN)

Prices went up for foreclosure-related sales on a quarterly and yearly basis, with the annual increase marking the first rise in two years, according to RealtyTrac’s Q2 Foreclosure sales report.

The average price for foreclosure-related sales stood at $170,040, a 6 percent increase from the previous quarter and a 7 percent hike from the second quarter of 2011. The annual increase is the first since the second quarter of 2010 and the biggest yearly increase since the fourth quarter of 2006.

“The second quarter sales numbers provide solid statistical evidence of what we’ve been hearing anecdotally from real estate agents, buyers and investors over the past few months: there is a limited supply of available foreclosure inventory to choose from in many markets,” said Daren Blomquist, RealtyTrac Vice President. “Given this shortage of supply and the seasonally strong buyer demand in the second quarter, it’s no surprise that the average foreclosure-related sales price increased both on a quarterly and annual basis.”

Nearly a quarter (23 percent) of all home sales in the second quarter were either bank-owned properties or in some stage of foreclosure, compared to 22 percent in the previous quarter and 19 percent a year ago in the second quarter.

Homes in foreclosure and REOs sold at an average discount of 32 percent below non-foreclosures, up from 30 percent in the previous quarter and second quarter of 2011.

REO sales made up 12 percent of all sales in the second quarter and had an average sales price of $155,892. The price is a quarterly and yearly increase of 6 percent and 10 percent, respectively.

REOs sold at a 37 percent discount compared to non-foreclosures, unchanged from the previous quarter but down from 38 percent a year ago. (RealtyTrac)

Strong employment reports boosted mortgage rates back up for the second week in a row, Freddie Mac reported Thursday.

The GSE’s Primary Mortgage Market Survey shows the 30-year fixed averaging 3.59 percent (0.6 point) for the week ending August 9, an increase from 3.55 percent the previous week.

Frank Nothaft, VP and chief economist at Freddie Mac, said the week’s positive employment news may be a sign of more growth to come.

“Fixed mortgage rates inched up again this week following stronger-than-expected employment reports. The economy added 163,000 jobs in July, well above the market consensus forecast of 100,000 and the largest increase since February,” Nothaft said. “In addition, the number of announced corporate layoffs fell 45 percent in July compared to last July and was the third time this year that announced layoffs were less than the same month in 2011, according to The Challenger Report. This suggests further net gains in employment are likely in the near future.”

Bankrate reported marginal gains in mortgage rates. The 30-year fixed increased to 3.81 percent (from 3.77 percent last week), while the 15-year fixed inched up to 3.00 percent (from 2.99 percent). Meanwhile the 5/1-year ARM stayed flat at 2.91 percent.

“With investors no longer feeling as if the sky is falling, at least temporarily, fixed mortgage rates did move a tad higher. Mortgage rates are closely related to yields on long-term government bonds. Should the better economic news continue, it would keep further Fed stimulus at bay, and likely push up rates a bit more, so stay tuned,” Bankrate said.

The third week of July brought news of more mortgage rate lows, according to Freddie Mac’s Primary Mortgage Market Survey (PMMS).

For the week ending July 19, the 30-year fixed averaged 3.53 percent (0.7 point), down from 3.56 percent the previous week and 4.52 percent the year before. In all of 2012, the average 30-year fixed has only gone to 4.00 percent or higher for one week.

The average 15-year fixed for the week was 2.83 percent (0.6 point), down from 2.86 percent the week before and 3.66 percent at the same time in 2011. This week marks the eighth consecutive week that the average 15-year fixed-rate mortgage has been below 3.00 percent.

The 5-year adjustable-rate mortgage (ARM) also fell, averaging 2.69 percent (0.6 point), a drop from 2.74 percent last week. The 1-year ARM saw no changes, hovering at 2.69 percent (0.4 point).
Frank Nothaft, VP and chief economist at Freddie Mac, explained how the low rates are aiding in the housing market’s recovery.

“With little signs of inflation and the Federal Reserve’s ‘Operation Twist’ keeping U.S. Treasury bond yields in check, fixed mortgage rates are remaining low and helping to stir the housing market,” said Nothaft. “For instance, the 12-month growth rate in the core Consumer Price Index has been in a narrow 2.1 to 2.3 percent band over the past nine months ending in June. Meanwhile, new construction on one-family homes rose for the fourth consecutive month in June to its strongest pace since April 2010 with builders restocking their lean inventories of new homes. In fact, homebuilder confidence for the next six months rose for the third month in a row in July to its highest reading since March 2007.”

Bankrate also posted new record lows, with the 30-year fixed falling to 3.78 percent from 3.79 percent the week before. The 15-year fixed averaged 3.04 percent, inching down from 3.05 percent in the previous survey. Meanwhile, the average 5/1 ARM rate fell to 2.89 percent, a slide down from 2.95 percent (PMMS)

After falling flat in May, asking prices went up in June, and rent prices continued to see significant increases, according to reports from Trulia released Tuesday.

Asking prices on listed homes made a 0.3 percent month-over-month and year-over-year increase in June, according to Trulia’s price monitor. Quarter-over-quarter, asking prices rose by 0.8 percent. When excluding foreclosures, asking prices moved upwards by 0.8 percent from May to June and by 1.7 percent from June 2011. Asking prices are said to lead sales prices by about two to three months.

“We saw asking prices start to rise in February and predicted that other home price indexes would report sales price increases this summer for those homes – and they have,” said Jed Kolko, Trulia’s Chief Economist. “Since February, asking prices showed solid gains in four out of five months, including in June, so I expect to see the sales-price indexes show further increases in the months to come.”

Despite these gains, Trulia warned that some of these top performing metros will start moving in the opposite direction.

Prices for rent made a 5.4 percent jump in June compared to the year before, according to Trulia’s rent monitor.(TRULIA)

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For the third month in a row, home prices posted both yearly and monthly gains, according to CoreLogic’s May Home Price Index (HPI) report.

When including distressed sales, home prices increased 2 percent in May from a year ago and rose 1.8 percent month-over-month.

When excluding distressed sales, prices made even greater strides, with the year-over-year increase at 2.7 percent and month-over-month increase at 2.3 percent. Distressed sales include short sales and REO transactions.

“The recent upward trend in U.S. home prices is an encouraging signal that we may be seeing a bottoming of the housing down cycle,” said Anand Nallathambi, president and CEO of CoreLogic. “Tighter inventory is contributing to broad, but modest, price gains nationwide and more significant gains in the harder-hit markets, like Phoenix.”

The CoreLogic Pending HPI points to another monthly gain in June. Prices should increase next month by 1.4 percent when including distressed sales, and when excluding distressed sales, prices are expected to rise by 2 percent. (DSNEWS/CoreLogic)

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Since the robo-signing controversy in October 2010 forced lenders to re-evaluate and revamp their foreclosure procedures, there has been a roller coaster pattern in REO activity in many local markets, including Chicago, Miami and Atlanta as demonstrated in the graph below.

Here’s our interpretation of what is happening: lenders have been able to gradually sell off REOs in these markets over the last 18 months even as they have been holding back on new bank repossessions because of shifting foreclosure processing guidelines.

As lenders slowly adjust to those new guidelines they are pushing through batches of distressed loans into REO — but only those they are confident have been foreclosed on properly. This all results in the saw tooth pattern showing up in some markets.

Positive Side Effects
Although the foreclosure processing delays triggered by robo-signing are stalling any quick and definitive real estate recovery, they have caused some side effects that may be positive for the overall housing market.

First, the artificially restricted supply of REO inventory is resulting in pent-up demand in some markets. That means new foreclosed homes for sale — particularly those in good condition — often receive multiple bids and can be sold quickly.

The shortage of REO inventory is also resulting in a stabilization of REO sales prices. While the average price of pre-foreclosure (short) sales dropped to a record low in the first quarter of 2012, average REO sales prices have flattened out over the past several quarters. (REALTYTRAC)