HUD: Housing Improves; Still Needs Further Recovery

The U.S. Department of Housing and Urban Development (HUD) released its April 2014 Housing Scorecard, noting that home prices remained stable, foreclosure completions continued to their lowest levels since mid-2007, existing home sales stabilized, new home sales slowed, and the administration's foreclosure mitigation efforts continued to provide relief for troubled homeowners.

The agency found that as of February 2014, the FHFA purchase-only house price index rose 6.9 percent year-over-year, and ticked up .6 percent from January, seasonally-adjusted. The seasonally adjusted purchase-only index for the U.S. found that home values are on par with prices from mid-2005.

Foreclosure completions totaled approximately 29,000 in March, down 5 percent from February and down 34 percent from March 2013. The drop in foreclosures represented the lowest level seen since July 2007. Newly initiated foreclosures were roughly 55,700, up 7 percent from February.

Regardless, foreclosure starts were still down 24 percent from last year.

HUD found that existing-home sales stabilized in March, remaining virtually unchanged. Existing-home sales were below year-ago levels for the fifth consecutive month. The report from HUD cites a National Association of Realtors report that attributed the stagnation in sales to low inventory, fewer distressed properties, strict banking lending standards, less favorable affordability, and the unusually harsh winter.

New home sales also experienced a slump, dropping 14.5 percent to a seasonally adjusted annual rate of 384,000 in March—an eight month low. "New home sales were down 13.3 percent from a year earlier, the first annual decline since the third quarter of 2011," HUD found.

The government's loss mitigation programs provided a bright spot in HUD's report. The government agency found that 2 million homeowner assistance actions have taken place through the Making Home Affordable Program, which included nearly 1.4 million permanent modifications through the Home Affordable Modification Program (HAMP).

HUD found that the Federal Housing Administration (FHA) has offered nearly 2.3 million loss mitigation and early delinquency interventions through March. Additionally, mortgage aid was extended 7.7 million times, outpacing foreclosures. Housing counselors also continued to provide assistance, counseling 10.3 million households since April 1, 2009.

In total, more than 8.3 million mortgage modifications and other assistance arrangements were completed between April 2009 and the end of March 2014.

HUD tempered its good news with a word of caution:

"Encouraging news notwithstanding, there is a need to continue with recovery efforts as home sales have slowed, too many homeowners remain underwater, and mortgage delinquencies rates remain elevated. There is also considerable geographic variation in market conditions not captured in the national statistics, which suggests some markets are improving at different rates than others."