While the housing market is still far from "normal," it is inching that way, according to a report released Thursday from Zillow. Last year's skyrocketing home price appreciation, frenzied demand from investors, and high tide of negative equity are all expected to subside somewhat this year, according to the real estate company.
Nationally, home prices increased 6.4% year-over-year in the fourth quarter, but annual price gains are expected to fall to 4.8% by the end of this year. On a quarterly basis, prices rose 1.4% in the fourth quarter. However, some of the markets that posted the highest price gains last year are already slowing, which according to Zillow, is "a welcome sign in markets that risk crossing over into bubble territory as rising mortgage interest rates create affordability issues for homebuyers."
An estimated 44,000 homeowners received permanent loan modifications from mortgage servicers during the month of November under both proprietary servicer programs and the government's Home Affordable Modification Program, HOPE NOW reports. While that total represents a 12% decrease from the 50,000 loan mods completed in October, the most recent data show a steeper 20 percent decline in foreclosure sales and a 17% decline in foreclosure starts between October and November.
Eric Selk, executive director of HOPE NOW, stated, "As we approach the seven million mark for completed loan modifications, we remain convinced that the collaborative efforts of the industry, non-profits, government agencies and local community groups continues to make a positive impact on the nation's housing market," commented Eric Selk, executive director of the private-sector alliance of mortgage servicers, investors, mortgage insurers, and nonprofit counselors.