Worst May Be Over for Foreclosure Epidemic

Worst May Be Over for Foreclosure Epidemic

Foreclosures have fallen in about 62 percent of the country’s 212 largest metro markets in the third quarter, leading to more stability in the housing market recovery, RealtyTrac reports in its latest foreclosure report.

What’s more, RealtyTrac reports that foreclosure activity in 58 percent of the major markets have fallen to below September 2007 levels. In some markets, foreclosures have decreased by 26 percent or more, such as in Detroit, Los Angeles, Phoenix, San Francisco, and San Diego.

“Most of the nation’s housing markets are past the worst of the foreclosure problem,” says Daren Blomquist, RealtyTrac’s vice president.

A few markets are still seeing foreclosures rising, however. For example, several Florida areas are seeing a jump. Foreclosures were up 64 percent in Palm Bay, Fla., up 43 percent in Tampa; and up 32 percent in Jacksonville, Fla. Florida is a “judicial state,” where foreclosures must get the court’s OK before they’re final.

The majority of the nation’s highest foreclosure rates fall in California, Florida, Arizona, and Nevada. The only cities outside those states in the top 20 highest foreclosure rate list are Chicago, which has the ninth-highest foreclosure rate and has seen a 34 percent increase over year-ago levels in its foreclosures; and Atlanta, which is number 15 on the list.

Stockton, Calif., continued to have the nation’s highest foreclosure rate, yet still had a 21 percent decline in foreclosures, RealtyTrac reports.

Source: “Foreclosures Fall in 62% of U.S. Cities,” CNNMoney (Oct. 25, 2012)

Homebuilders Need More Land, Analysts Say.

Homebuilders Need More Land, Analysts Say.

Homebuilders need to “replenish their land inventories” to respond to the projected growth in buyer demand within the next few years, say Moody’s Investor Service analysts. Part of what’s hampering them from doing so: They lack revolving lines of credit due to the housing downturn and applying for more credit has been a challenge in recent years.

“During the housing bubble, many builders bought remaining lots of land to build new homes,” HousingWire reports. “This has resulted in a scenario where companies cannot sell the lots with homes priced at values comparable to estimates set when the lots were first acquired.”

Homebuilders are continuing to dig their way out of a slump and into recovery-mode recently. For example, PulteGroup recently reported its highest third quarter earnings since 2006 and increasing its land spend by $90 million to $1 billion, HousingWire reports.

Source: “Homebuilders Need More Land as Housing Recovery Continues,” HousingWire (Oct. 26, 2012)

Home Owners Near Foreclosures Feel Big Loss Too

Home Owners Near Foreclosures Feel Big Loss Too

Home owners living near a foreclosed property have faced about $2 trillion in losses to property values, according to a new report by the Center for Responsible Lending, which analyzed the impact of foreclosures on properties within one-eighth mile of a home in foreclosure.

“Communities with high concentrations of foreclosures lose tax revenue and incur the financial and  non-financial costs of abandoned properties and neighborhood blight, while home owners living in close proximity to foreclosures suffer loss of wealth through depreciated home values,” according to the report.

Home owners who live near a foreclosed property have lost, or stand to lose, about 7.2 percent — or $21,077, on average — of their home’s value, according to the report. In minority neighborhoods, the loss was found to be even greater: Home owners living near foreclosures lost 13.1 percent of their home value, or $37,084 on average.

Source: “Foreclosure Fallout Cost Nearby Home Owners $2 Trillion,” NBC News (Oct. 24, 2012)

Remodeling Activity Bounces Back to 2005 Levels

Remodeling Activity Bounces Back to 2005 Levels

More home owners are tackling remodeling jobs once again, as the Remodeling Market Index heats up and climbs to its highest point since the third quarter of 2005, the National Association of Home Builders reports. The greater momentum in remodeling is yet another positive trend recently trickling through the housing sector, NAHB reports.

“The strength of the [Remodeling Market Index], especially in owner-occupied properties, shows that home owners are investing in remodels as home prices stabilize,” says George “Geep” Moore Jr., NAHB Remodelers chairman. “As owners become more confident that investments in housing will hold their value, they are beginning to undertake projects to improve their comfort that they had been putting off.”

The index showed an increase in all three of the indicators measured: maintenance and repairs, minor additions and alterations, and major additions and alterations.

“The improvement in the RMI provides more evidence that the remodeling industry is making the orderly recovery from its low point in 2009 as we’ve been expecting,” says NAHB Chief Economist David Crowe. “Although remodeling projects over $25,000 are now showing some signs of strength, they are still lagging behind smaller property alterations and maintenance and repair jobs. The recovery of the remodeling market in general, and large projects in particular, continues to be constrained by factors such as tight credit and problematic appraisals.”

Source: National Association of Home Builders

Federal Reserve vows to keep Rates Low.

Federal Reserve vows to keep Rates Low

The Federal Reserve acknowledged Wednesday that segments of the economy are looking up, particularly housing and household spending. However, the Fed said it will continue to press forward with its stimulus campaign — which includes a move that is lowering mortgage rates — until the economy shows more growth.

At its latest meeting, the Federal Reserve renewed its vow to keep rates near zero until mid-2015. It will also continue to buy $40 billion in mortgage-backed debt each month, a program known as “QE3,” which has helped to push mortgage rates into record-low territory in recent weeks.

“The committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions,” the Fed said in a statement.

The Federal Reserve said that unemployment still remains high at 7.8 percent, the “fiscal cliff” looms at the end of the year, the global economy is struggling, and the U.S. gross domestic product grew at an annual rate of only 1.3 percent in the second quarter.

Source: “Fed Pledges to Maintain Stimulus,” The New York Times (Oct. 24, 2012)

New-Home Sales Surge 5.7% in September

New-Home Sales Surge 5.7% in September

New-home sales posted their largest gain in more than two years in September, the Census Bureau reported Wednesday. New-home sales rose 5.7 percent in September over August and are 27.1 percent higher year-over-year.

The median price of a new home in September was $242,400, up 11.7 percent from a year earlier. Analysts contribute the increase to the tight supply of inventories of new-homes on the market. Inventories of new-homes are at their tightest supplies since August 2005.

“Combined with consistent, positive reports on housing starts, permits, prices and builder confidence in recent months, today’s data on New-home sales provides further confirmation that a gradual but steady housing recovery is underway across much of the nation,” says Barry Rutenberg, chairman of the National Association of Home Builders. “Consumers who have been on the sidelines during the past few years are deciding now is the time to go forward with a new-home purchase, assuming they can qualify for a good mortgage under today’s exceedingly stringent guidelines.”

Regionally, the largest gains in new-home sales in September occurred in the Northeast, where sales rose 16.7 percent; followed by the South with a 16.8 percent increase; and the West posted a 3.9 percent increase. The Midwest saw new-home sales fall 37.3 percent.

Source: “New-Home Sales Hit 2-Year Hight,” CNNMoney (Oct. 24, 2012) and the National Association of Home Builders