How good is the current condition of the economy and real estate market? If that is measured by homeowners remaining in their homes and current with their mortgage payments, than the answer is very strong. RealtyTrac reported This Week in Real Estate that through the first half of the year, more homeowners are avoiding foreclosure than ever before. Below are a few highlights from the second week of July that influence our business:
* Freddie Mac: Brexit to Push Housing Market Forward in 2016. International concerns such as slowing growth in China and the Brexit vote in the U.K. played a major role in driving down mortgage rates in the U.S., according to Freddie Mac’s monthly Outlook for July. In fact, after the U.K.’s vote to leave the European Union, mortgage rates continue to lower, closing the gap even more to all-time lows at 3.41%. “With the U.K.’s decision to exit from the European Union, global risks increased substantially leading us to revise our views for the remainder of 2016 and all of 2017,” Freddie Mac Chief Economist Sean Becketti said. “Nonetheless, the turbulence abroad should continue to create demand for U.S. Treasuries and keep mortgage rates near historic lows,” Becketti said. “Thereby, allowing home sales to have their best year in a decade, along with a boost in refinance activity.” Due to these recent global pressures, Freddie Mac revised the 30-year fixed-rate mortgage forecast down by 30 basis points for 2016 and by 50 basis points for 2017 to 3.6% and 4% respectively. The home price appreciation forecast for 2016 remains at 5% in 2016 and 4% in 2017.
* Lots in 2015 are Smallest on Record. The median lot size of a new single-family detached home sold in 2015 dropped under 8,600 square feet for the first time since Census Bureau’s Survey of Construction (SOC) started tracking the series. An acres is 43,560 square feet, so the current median lot size is just under one-fifth of an acre. While nation’s lots are getting smaller on average, the regional differences in lot sizes persist. Looking at single-family (attached and detached) speculatively built (or spec) homes started in 2015, the median lot size in New England exceeds half an acre. This is 2.6 times larger than the national median lot. The East South Central Division comes as a distant second with the median lot occupying less than a third of an acre. The Pacific Division where densities are high and developed land is scarce has the smallest lots, with half of the lots being under 0.15 acres. The neighboring Mountain and West South Central Divisions also report typical lots smaller than a national median, 0.17 and 0.16 acres, respectively.
* Foreclosures, Serious Delinquencies Nearing Decade Low. The number of homes in some stage of foreclosure and the number of seriously delinquent mortgages continued to decline in May, falling to the lowest level in nearly nine years, since October 2007, according to CoreLogic. CoreLogic’s May 2016 National Foreclosure Report shows the national foreclosure inventory, which is the total number of homes at some stage of the foreclosure process and completed foreclosures, hovers around 390,000 homes. CoreLogic’s report also showed that in May, the foreclosure inventory declined by 24.5% and completed foreclosures declined by 6.9% compared with May 2015. “Delinquency and foreclosure rates continue to drop as we experience the benefits of a combination of tight underwriting, job and income growth and a steady rise in home prices,” said Anand Nallathambi, President and CEO of CoreLogic.
* RealtyTrac: More Homeowners are Avoiding Foreclosure Than Ever Before. TA new report from RealtyTrac shows that more homeowners are keeping their homes out of foreclosure than ever before. The good news comes courtesy of RealtyTrac’s Midyear 2016 U.S. Foreclosure Market Report, which shows that there were a total of 253,408 properties that started the foreclosure process in the first half of 2016. That’s down 17% from one year ago and the lowest level for any half-year period since RealtyTrac began tracking foreclosure starts in 2006, the company said. And it’s not just foreclosure starts that are on the decline. According to RealtyTrac’s report, there were a total of 94,469 U.S. properties with a foreclosure filing (default notices, scheduled auctions or bank repossessions) in June, which is down 6% from May, down 19% from the same time period a year ago, and the lowest level since July 2006.