Foreclosures Fall to 5-Year-Low

Daily Real Estate News | Monday, November 25, 2013

National foreclosure pre-sale inventory is at its lowest point since 2008, Lender Processing Services reports.

The inventory—which reflects the number of loans that are in some stage of foreclosure—represents 2.54 percent of all mortgaged homes in LPS' October data. That marks a 3.23 percent drop month-over-month, and a nearly 30 percent year-over-year drop. LPS’ data reflects about 70 percent of the mortgage market.

The National Association of REALTORS® reported last week that distressed homes are making up fewer of the total existing-home sales recorded in the past year. Sales of distressed homes—which include foreclosures and short sales—made up 14 percent of October sales, down 25 percent year-over-year.

Distressed sales tend to sell at a discount. NAR reported that foreclosures sold for an average discount of 17 percent below market value in October. Short sales were discounted 14 percent below market value.

Source: “Foreclosure Inventory Falls to 5 year Low,” Mortgage News Daily (Nov. 22, 2013) and National Association of REALTORS®

Another Sign Foreclosure Crisis Is Evaporating?

Daily Real Estate News | Thursday, November 14, 2013

Mortgage delinquency rates fell in the third quarter, marking it the seventh consecutive quarter for such a decrease, according to TransUnion data.

Mortgage delinquencies of at least 60 days dropped 4.09 percent in the third quarter, following a 4.32 percent drop in the second quarter. A year ago, mortgage delinquencies posted a 5.33 percent drop, according to TransUnion.

"We looked at all 52 million installment-based mortgages in the U.S., and the trend is clear — the percentage of borrowers willing and able to make their mortgage payments continues to improve," says Tim Martin, a TransUnion executive. "The overall delinquency rate is still high relative to 'normal,' but a 23 percent year-over-year improvement is great news for home owners and their lenders."

Source: “Mortgage Delinquencies Decline in 3rd Quarter -- TransUnion,”The Wall Street Journal (Nov. 12, 2013)

College Grads Face Home Ownership Delays

Daily Real Estate News | Monday, November 04, 2013

The home ownership rate among college graduates is less than non-grads for the first time on record, according to the New York Federal Reserve.

College graduates are facing increasing obstacles to home ownership, mostly due to high debt levels and weak job prospects. The delay in Millennials entering into home ownership could be a drag on the housing industry for years to come, CNNMoney reports.

The average student loan debt has climbed to $27,500, according to data from the Project on Student Debt. Lenders factor in debt—including student loan debt—when calculating how much mortgage they’ll give a person to buy a home. What’s more, if young professionals miss a payment on their student loans, that can damage their credit scores and further hamper their chances for qualifying for a mortgage.

However, renting a domicile is also an important stepping stone to home ownership. Thirty-six percent of young graduates are living with their parents, according to a Pew survey. That has prevented them from building credit histories, which they also need to get a mortgage.

Some of the effect has already been seen in the shrinking number of first-time home buyers. The National Association of REALTORS®  reported in their September housing numbers that first-time buyers accounted for 28 percent of existing-home purchases, down from 32 percent in September 2012.

Source: “Young and Smart, but Millennials Face Homebuying Hurdles,” CNNMoney (Oct. 31, 2013)