Home/Mortgages/May Housing Scorecard: Housing Market Steady, Showing Promise

June 7, 2012 (Chris Moore)

The overall outlook for the housing market remains mixed but signs of stability show promise according to the May release of the Obama Administration’s Housing Scorecard with home prices and sales continuing to show signs of improvement as inventory becomes more balanced and foreclosure activity declines.

Mortgage delinquency rates on prime, sub-prime and FHA mortgages increased on a monthly basis and with the exception of loans insured by the FHA, were still down year-over-year.

At the end of April, the delinquency rate of prime mortgages that were at least 30 days or more delinquent moved up a notch to 3.9 percent, increasing from 3.8 percent in March. In April of last year, the delinquency rate was 4.3 percent.

Performance of sub-prime mortgages also worsened as the percentage of delinquent loans increased to 28.9 percent from 28.6 percent in March but still down from 32.2 percent posted a year earlier.

Delinquency rates of mortgages insured by the Federal Housing Administration (FHA) also increased, climbing to 11.6 percent in April from 11.4 percent in March. The delinquency rate on FHA loans a year ago was 11.1 percent.

Seriously delinquent prime mortgages, those that are 90 days or more past due, declined in April with 1.395 million loans in trouble, down from 1.404 million in March and down from 1.512 million a year earlier.

Sub-prime mortgages that were seriously delinquent numbered 1.609 million in April, up from a revised 1.607 million in March. In April of last year, 1.632 million sub-prime mortgages were seriously delinquent.

Loans insured by the FHA that were seriously delinquent fell slightly to 707,000 in April, down from 708,000 in March, but up substantially from 576,000 in April 2011.

HOPE NOW proprietary loan modifications increased slightly in March, climbing to 46,494 modifications from 44,549 modifications in March and. HARP refinances skyrocketed from 44,500 in February to 79,500 in March.

Home prices through the end of March were beginning to show improvement with two out of the three indices used in the Housing Scorecard, Core-Logic and FHFA, posting slight increases while the Case-Shiller Indices remained about the same. Prices in two of the three Indices were up from a year ago.

Sales of new homes increased by a seasonally adjusted 3.2 percent from March to April while sales of existing homes were revised and increased by a seasonally adjusted 3.4 percent.

Distressed property sales accounted for 27 percent of all re-sales in March, down from 30 percent in February and down from 34 percent the previous year.

The inventory of existing homes remained increased from the previous month with a 6.6 months supply of homes available for purchase. New home inventory fell to a 5.1 months supply of inventory, down from a revised 5.2 months supply in March.

Foreclosure activity fell in April with foreclosure starts falling 7.4 percent and foreclosure sales fell by 2.0 percent. Compared to a year ago, foreclosure starts and sales are down with starts down 5.5 percent and foreclosure sales down 10.2 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.

Erika Poethig, HUD Acting Assistant Secretary , stated, “This month’s indicators show promise – more than 180,000 borrowers took advantage of our enhanced Home Affordable Refinance Program in the last quarter alone and foreclosure starts are declining as more homeowners secure mortgage relief – but with so many households still struggling to make ends meet it’s clear that we have more work ahead.”

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