Housing Scorecard: Signs of Strengthening

October 17, 2012 (Chris Moore)

The housing market continued to show gradual signs of improvement during July and August according to the September release of the Obama Administration’s Housing Scorecard as home prices continued to strengthen along with existing home sales and overall loan performance.

Mortgage delinquency rates on prime, sub-prime and FHA mortgages fell across the board in August with the delinquency rate of prime mortgages that were at least 30 days or more delinquent decreasing from 4.0 percent in July to 3.8 percent in August. In August of last year, the delinquency rate was 4.4 percent.

Performance of sub-prime mortgages also improved as the percentage of delinquent loans fell to 29.0 percent from 29.1 percent in July and was down from 32.0 percent posted a year earlier.

Delinquency rates of mortgages insured by the Federal Housing Administration (FHA) also fell, declining to 11.7 percent in August from 11.9 percent in July. The delinquency rate on FHA loans a year ago was 12.1 percent.

Seriously delinquent mortgages, those that are 90 days or more past due, improved in two of the three categories with the number of prime mortgages in trouble declining to 1.311 million loans in August, down from 1.335 million in July and down from 1.457 million a year earlier.

Sub-prime mortgages that were seriously delinquent numbered 1.560 million in August, down from 1.585 million in July. In August of last year, 1.728 million sub-prime mortgages were seriously delinquent.

Loans insured by the FHA that were seriously delinquent increased to 728,000 in August, up from 726,000 in July, and were 19.0 percent higher than the 612,000 delinquent loans in August 2011.

Loan originations for home purchases increased 6.7 percent from the first quarter of 2012 to the second quarter but were 9.0 percent lower than last year while refinance originations were up 11.0 percent from the first to the second quarter and were up 41.8 percent from the second quarter of last year.

Home prices continued to improve with all three of the indices used in the Housing Scorecard, Core-Logic, FHFA and the Case-Shiller Indices, posting pricing gains in both July and the previous year.

Sales of new homes fell by a seasonally adjusted 0.3 percent from July to August, while sales of existing homes improved by 7.8 percent.

Distressed property sales accounted for 22 percent of all re-sales in July, down from a revised 23 percent in June and down from 26 percent the previous year.

The inventory of existing homes listed for sell increased by 2.9 percent but the number of months supply fell slightly from the previous month with a 6.1 months supply of homes available for purchase. New home inventory remained unchanged with a 4.5 months supply of homes for sale.

Foreclosure activity was mixed in August with foreclosure starts increasing 1.2 percent and foreclosure sales falling by 2.4 percent. Compared to a year ago, foreclosure starts and sales were both down with starts down 13.2 percent and foreclosure sales down 19.1 percent.

The estimated number of homeowners whose homes are worth less than what they owed declined to 10.8 million at the end of the 2nd quarter of 2012 from a revised 11.4 million at the end of the first quarter.

Tags: September Housing Scorecard, Obama Administration, loan modifications, mortgage delinquencies, trial modifications, prime mortgages, sub-prime mortgages, FHA

Source:
HUD