November Housing Scorecard: Still Fragile with Signs of Stability

December 9, 2011 (Chris Moore)

The housing market continued to show its fragility in November but yet like last month, also continued to show encouraging signs of stability according to the latest release of the Obama Administration’s Housing Scorecard.

Loan performance improved in October with delinquencies on prime and sub-prime mortgages showing improvement while delinquent FHA loans continued on an upward trend.

At the end of October, prime mortgages that were at least 30 days or more delinquent declined from 4.4 percent in September to 4.2 percent in October. In October of last year, the delinquency rate was 5.2 percent.

Performance of sub-prime mortgages also continued to improve as loans that were 30 days or more delinquent fell to 31.2 percent in October, down from 31.8 percent in September and down from 36.4 percent posted a year earlier.

Delinquency rates of mortgages insured by the Federal Housing Administration (FHA) increased in October to 12.7 percent, up from 12.4 percent in September. The delinquency rate on FHA loans a year ago was 12.1 percent.

Seriously delinquent prime mortgages, those that are 90 days or more past due, showed improvement in October with 1.443 million loans in trouble, down from a revised 1.454 million in September and also down from 1.625 million a year earlier.

Sub-prime mortgages that were seriously delinquent numbered 1.768 million in October, up slightly from a revised 1.767 million in September. In October of last year, 1.840 million sub-prime mortgages were seriously delinquent.

Loans insured by the FHA that were seriously delinquent increased to 662,000 in October, up from 635,000 in September and also up from 534,000 in October 2010.

Since the beginning of the government’s mortgage assistance efforts in 2009 until the end of October 2011, over 5.4 million modification arrangements have been started. In October, 26,102 homeowners received a permanent loan modification through the Homeowner Affordable Modification Program (HAMP) while 21,445 trial modifications were started raising the total amount of all permanent modifications started to 883,076.

To date, homeowners that have received a permanent loan modification through HAMP saved a median of $527.05 per month on their mortgage payment, more than a one-third of their median before-modification payment.

HOPE NOW proprietary modifications declined in October to 50,400 modifications from a revised 55,800 modifications in September.

Home prices were generally flat with two out of the three indices used in the Housing Scorecard posting very modest gains while one posted a slight decline through the end of September.

Sales of new homes increased by a seasonally adjusted 1.2 percent from September to October while sales of existing homes increased by a seasonally adjusted 1.4 percent.

The inventory of existing homes declined in October to an 8.0 months supply, down from a revised 8.3 months supply of homes for sale in September. New home inventory also decreased to a 6.3 months supply of inventory, down from a 6.4 months supply in September.

Both foreclosure starts and foreclosure sales increased in October with starts increasing 9.9 percent and foreclosure sales increasing 7.8 percent. Compared to a year ago, foreclosure starts and sales are down substantially with starts down 36.0 percent and foreclosure sales down 17.2 percent.

“Despite growing evidence of progress in the broader economy, the housing data in this month’s Scorecard offer continued mixed signals and some signs of weakness in the market,” said HUD Assistant Secretary Raphael Bostic. “The Administration remains committed to helping all homeowners who have been hit hard during this housing crisis, and as the Regional Spotlight shows our efforts have helped over 135,000 families avoid foreclosure in Atlanta. But we have much more work to do to reach the many households who still face trouble and to help the market recover.”

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

Source:
HUD
Treasury Department