What Foreclosure Wave? False Alarm?

What Foreclosure Wave? False Alarm?

Many housing experts for months have been warning a foreclosure wave would soon flood several markets throughout the country. But was it all a false alarm?

Recent surveys have shown that foreclosure sales have dropped to their lowest point in more than two years. And while according to March data, 8 percent more homes did enter the foreclosure process from the previous month, that number is down more than 30 percent from a year ago, according to Lender Processing Services.

CNBC real estate reporter Diana Olick notes that it could be another delay in the foreclosure system “as banks try to modify more loans to meet some of the terms of the [$25 billion] servicing settlement. The foreclosure sales decline also appears to be exclusively in private and portfolio loans, which again points to the settlement.”

Meanwhile, banks are increasing their number of short-sale transactions, and some surveys have shown that short sales are actually now outpacing foreclosure sales — the first time that’s ever occurred.

“Lenders are increasingly recognizing that short sales may be a better alternative for them than foreclosure,” RealtyTrac’s Daren Blomquist told CNBC. “This trend began in markets with stronger demand and where the distressed inventory tends to be newer homes (Phoenix, Los Angeles, Las Vegas), but the trend appears to be spreading to other markets like Atlanta and Detroit.”

Source: “Flood of Foreclosures Still Fails to Materialize,” CNBC (May 2, 2012)

30-Year Fixed Mortgage Rate Continues to Slide.

30-Year Fixed Mortgage Rate Continues to Slide

Mortgage rates for 30-year fixed mortgages fell this week, with the current rate borrowers were quoted on Zillow Mortgage Marketplace at 3.69 percent, down from 3.72 percent at this same time last week.

After rising to 3.77 percent on Wednesday, the 30-year fixed mortgage rate hovered between 3.7 and 3.74 percent for the remainder of the week, falling to the current rate early this morning.

“Mortgage rates ended the month near all-time lows which is good news for those looking to refinance or purchase a home,” said Erin Lantz, director of Zillow Mortgage Marketplace.  “This coming week, we expect rates to remain fairly steady unless Friday’s Employment Situation Report falls outside of expectations.”

Additionally, the 15-year fixed mortgage rate this morning was 2.97 percent and for 5/1 ARMs, the rate was 2.62 percent.

Green Homes Increase Market Share.

Green Homes Increase Market Share

Remodeling and construction of single-family homes to make them Green Homes continues to grow as more attention is placed on the benefits of going green for energy efficiency savings and better indoor quality, a new study shows.

In the construction market, the Green Homes market share has grown to 17 percent in 2011. That percentage is expected to rise to 29 percent to 38 percent by 2016, according to a new report by McGraw-Hill Construction, “SmartMarket Report: New and Remodeled Green Homes: Transforming the Residential Market.”

According to the report, the two key forces driving the green growth: Green homes are often viewed as higher quality and can potentially save consumers money on utility costs.

“In the current residential market, there is an enormous need to differentiate your homes for consumers,” says Harvey Bernstein, vice president of Industry Insights and Alliances at McGraw-Hill Construction. “When builders are able to offer homes that not only are green but also offer the combination of higher quality and better value, they have a major competitive edge over those building traditional homes.”

In the past, builders have cited higher upfront costs as a roadblock to building green. However, the survey found that a much lower percentage of builders view that as an obstacle now than in 2008.

The report was produced by McGraw-Hill Construction, in conjunction with the National Association of Home Builders and Waste Management.

Source: National Association of Home Builders

More Buyers Eye Unlisted Homes as Options.

More Buyers Eye Unlisted Homes as Options

As housing inventories shrink, more buyers are reportedly finding their perfect home in properties that haven’t even been listed on the market yet.

“Such back-pocket deals used to involve mostly luxury homes where buyers and sellers wanted to keep the sale hush-hush,” The Star Tribune reports. “But lower-priced houses are becoming a bigger part of the mix because even those are in short supply.”

Real estate professionals are helping these buyers sniff out these unlisted homes by working their network to identify sellers who would like to sell but are unsure if the market will give them enough on a sale. Agents are finding these sellers through referrals and also by home owners who once listed their homes for sale but removed their homes from the MLS after they lingered on the market. Agents are also finding home owners who turned their homes into rentals as a good source for options too.

“There is a shadow market out there with a lot of people who want to sell,” Joe Grunnet, a broker in Minneapolis, told The Star Tribune. “[Home owners] just don’t know they can sell in this market. They still think the world is coming to an end.”

Source: “Impatient Buyers Target Homes Before They go on Sale,” Star Tribune (Minneapolis) (April 28, 2012)

Home ownership falls to lowest rate in 15 years.

Homeownership falls to lowest rate in 15 years

NEW YORK (CNNMoney) — Home ownership in the U.S. fell to its lowest rate in 15 years during the first quarter as more delinquent borrowers lost their homes to foreclosure, forcing many to rent.

The percentage of Americans who own their homes dropped a full percentage point over the past 12 months to 65.4% during the first three months of 2012, according to the latest Census Bureau data. That’s the lowest rate since 1997 and down from the peak of 69.2% reached in 2004.

“As foreclosures grew over the last six years, many homeowners became renters,” said Alex Villacorte, director of analytics for Clear Capital, a real estate valuation company.

The rental vacancy rate dropped to 8.8% during the first quarter, down from 9.7% a year earlier and from 9.4% in the last quarter of 2011, according to Census.

The growing demand has put pressure on the rental markets, said Villacorte. In many depressed housing markets, investors have been buying up distressed properties — foreclosures and short sales — fixing them up and renting them out.

The median asking rent last quarter was $721, up 5.6% from 12 months ago, according to Census.

Rents are highest in the Northeast, where the median is $932, followed by the West ($845), the South ($660) and the Midwest ($607).

Meanwhile, median home prices continue to fall. During the first quarter 2012, the median asking sales price for vacant units was $133,700. That’s down from $143,700 during the first quarter of 2011, according to Census.

Home ownership has fallen for all age groups, races and regions since the housing boom, Census reported.

It is lowest in the West, where it has dropped one percentage point over the past 12 months to 59.9%. The Midwest has the highest home ownership rate at 69.5%, down 0.9 point year-over-year; the South is second at 67.5% (down 0.9 point) and the Northeast is third at 62.5 (down 1.4 point).