March Housing Scorecard: Promising Signs of Stability

April 9, 2012 (Chris Moore)

The overall outlook for the housing market continued to be mixed but showed some promising signs of stability as delinquency rates and foreclosure sales fell in February while new and existing home sales were down slightly from January, but were still higher than the previous year’s levels, according to the March release of the Obama Administration’s Housing Scorecard.

Loan performance improved again in February with delinquency rates on prime, sub-prime and FHA mortgages falling slightly on a monthly and yearly basis.

At the end of February, the delinquency rate of prime mortgages that were at least 30 days or more delinquent was 4.1 percent, down from 4.2 percent in January. In February of last year, the delinquency rate was 4.8 percent.

Performance of sub-prime mortgages also improved as the percentage of delinquent loans fell to 29.6 percent from 31.2 percent in January and down from 34.1 percent posted a year earlier.

Delinquency rates of mortgages insured by the Federal Housing Administration (FHA) declined in February to 12.1 percent, down from 13.0 percent in January. The delinquency rate on FHA loans a year ago was 12.2 percent.

Seriously delinquent prime mortgages, those that are 90 days or more past due, declined in February with 1.417 million loans in trouble, down from 1.432 million in January and also down from 1.591 million a year earlier.

Sub-prime mortgages that were seriously delinquent numbered 1.709 million in February, down from a revised 1.737 million in January. In February of last year, 1.818 million sub-prime mortgages were seriously delinquent.

Loans insured by the FHA that were seriously delinquent fell to 724,000 in February, down from 734,000 in January, but up from 620,000 in February 2011.

HOPE NOW proprietary modifications decreased in February to 44,549 modifications from 56,687 modifications in January.

Home prices through the end of January were generally lower with two out of the three indices used in the Housing Scorecard, Case-Shiller and FHFA, posting declines while one, CoreLogic, posted a slight increase when distressed property sales were excluded. Prices in all three Indices were down from a year ago.

Sales of new homes declined by a seasonally adjusted 1.5 percent from January to February while sales of existing homes were revised and fell by a seasonally adjusted 0.8 percent.

The inventory of existing homes increased in February to a 6.5 months supply, down from a revised 6.0 months supply of homes for sale in January. New home inventory increased to a 5.8 months supply of inventory, up from a revised 5.7 months supply in January.

Foreclosure activity was mixed in February with foreclosure starts increasing a modest 0.8 percent but foreclosure sales fell by 2.1 percent. Compared to a year ago, foreclosure starts and sales are down with starts down 6.8 percent and foreclosure sales down 13.5 percent.

The estimated number of homeowners whose homes are worth less than what they owed increased to 11.1 million at the end of the 4th quarter of 2011 from 10.7 million at the end of the third quarter.

Raphael Bostic, Assistant Secretary of HUD, stated, “The data this month show that we’re making important progress in providing relief to homeowners under the Obama Administration’s programs. With fewer borrowers falling behind on their mortgages and some 425,000 families taking advantage of our enhanced Home Affordable Refinance Program – standing to save on average $2,500 per year – it’s clear that the Administration’s efforts continue to provide significant positive benefits. But 1 in 5 Americans still owes more than their home is worth. That’s why the Administration’s recent proposals are critical to promoting healing in the market. Our efforts to ramp up economic development in fragile neighborhoods and to expand homeowner access to low-interest refinance options reflect our commitment to turning these markets towards growth. That is why we are asking the Congress to approve the President’s housing proposals so that more homeowners can receive assistance.”

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

Source:
HUD