The January edition of the Obama Administration’s Housing Scorecard, which is a report on the housing market, was recently released. Progress was shown in several areas, including home sales, foreclosure rates, and homeowner’s equity levels. This shows a positive outlook, but it is important to remember that the economy is still recovering from the financial collapse five years ago. Any upswing, however, is good news for those that work in the housing market, whether mortgage professionals, real estate brokers, builders, or any other segment.
Rise In Existing And New Home Sales
In existing home sales, a 9.1 percent rise was seen from 2012. In 2013, 5.09 million dollars in sales were accounted for in existing homes and 428,000 new homes were sold, which is 16.4 percent above the 2012 level. These are some of the largest increases since 2006, which is a good sign for both realtors and for builders, as well as for mortgage professionals.
Foreclosure Rates Decrease Attributed To Making Home Affordable
As far as foreclosure rates, RealtyTrac reported that 747,728 properties began the foreclosure process in 2013. This is down 33 percent from 2012, which is the lowest total since 2005. Repossessions (REO) decreased 31 percent from 2012 to 462,970, which is the lowest level since 2007. Both of these factors indicate that homeowners are more able to take care of their loans, which translates into growth in other areas of the housing market as well.
“The January Housing Scorecard shows that the Obama Administration’s efforts continue to have a positive effect on the housing market,” said HUD Deputy Assistant Secretary for Economic Affairs Kurt Usowski. “In 2013, the number of U.S. properties which started the foreclosure process was down 33 percent from 2012, while sales of previously owned homes rose by 9.1 percent. With foreclosures down, home sales up, and equity continuing to grow, the housing market continues to make slow, but steadily improving progress.”
Most governmental experts attribute the decrease in foreclosures to the Making Home Affordable program that was started under the Obama Administration. The number of homeowners taking advantage of this program is steadily increasing, which allows them to find foreclosure alternatives or work through the Home Affordable Foreclosure Alternatives Program (HAFA) to take advantage of a short sale or deed-in-lieu to get out from under their home loan.
Home Equity Level Sees Significant Increase
Home equity continues to rise, which is good news for existing homeowners. The Federal Reserve reported that homeowner’s equity in their homes (total property value minus mortgage) is up $3.4 trillion, which is a huge 55 percent increase from the start of 2012 through the third quarter of 2013.
These three factors seeing positive trends is a good sign of a recovering housing market, as well as economy. While it will still take some time to get back to “normal” after the downward turns we saw five years ago, any positive signs are seen as a turn back toward a healthier housing market as a whole. As housing professionals, we need to continue to offer outstanding service and honest information that will ensure that homeowners have the information that they need to make the best decision for them and their future.