Tag Archives: Home Prices

In its August 2011 Budget and Economic Outlook update, the Congressional Budget Office (CBO) predicts the government will spend $35 billion less on Fannie Mae and Freddie Mac in 2011 than in 2010. The CBO estimates it will spend $5 billion on the GSEs in 2011 after having spent $40 billion last year. The CBO says the decrease is mostly due to lower projections in losses for the GSEs in upcoming years. This updated 2011 estimate is $6 billion lower than the CBO's previous estimate.

Short sales shot up 19 percent between the first and second quarters, with 102,407 transactions completed during the April-to-June period, according to RealtyTrac. Over the same timeframe, a total of 162,680 bank-owned REO homes sold to third parties, virtually unchanged from the first quarter. RealtyTrac's study also found that the time to complete a short sale is down, while the time it takes to sell an REO has lengthened. Discounts on both types of distressed properties increased last quarter.

Home prices were 0.6 percent lower in the second quarter than in the first quarter of 2011, according to the Federal Housing Finance Agency (FHFA). The agency's index is calculated using purchase price information on homes backing mortgages that have been sold to or guaranteed by Fannie Mae and Freddie Mac. Looking at this data over the past year, home prices have fallen 5.9 percent. That's the biggest annual drop recorded by FHFA since the second quarter of 2009.

The research firm John Burns Real Estate Consulting says if you're looking to find a comparable point of reference for current median home prices, prepare to take a trip back in time. On the positive end of the rankings, a bevy of Texas markets have reverted to circa 2006. Other especially hard-hit markets, such as Atlanta and Phoenix, have turned back the clock more than a decade. The nation's capital city, Los Angeles, and Fort Lauderdale fall somewhere in between.

Fannie Mae expects overall economic growth to decline, taking the housing market with it on its downward trend. The company bases these predictions on declining business and consumer confidence in addition to weak job growth. The GSE said in the August edition of its regular economic and mortgage market analysis report that ""recovery has clearly lost momentum."" Macro economic factors are driving the mindset of consumers, according to Fannie Mae, and housing is being impacted.

A report from Capital Economics states that housing values overall are undervalued by 20 percent, but Zillow says many metro price-to-income ratios are still above their historic averages. The current price-to-income ratio for the U.S. is 3.3 to 14 percent above the historical average, according to new research from Zillow. The company says more often than not, home values eventually come back in line with incomes. The most extreme over-corrections in home values have occurred in Detroit; Las Vegas; and Manchester, New Hampshire.

There were 3.65 million existing-homes available for sale at the end of July, according to the National Association of Realtors (NAR). That tally is down 1.7 percent from June, but the time it will take to clear the supply from the market has lengthened to 9.4 months because sales have slowed considerably over the summer months. NAR says sales of existing homes fell 3.5 percent in July to an annual rate of 4.67 million. Short sales and REOs accounted for 29 percent of last month's volume.

The term 'underwater' has become common industry jargon in today's marketplace of depressed home values and high loan balances, and it's increasingly making its way into the everyday vocabulary of consumers. Twenty-six percent of mortgage borrowers now say they are underwater, according to a new survey conducted by Fannie Mae. The GSE also found that the idea of being in negative equity is more prevalent among minorities, and that underwater borrowers are more likely to know someone who has defaulted on their mortgage.

Sales of foreclosed REO homes and short sales continue to dominate the Las Vegas market. These distressed sales made up nearly 70 percent of the region's home resales in June, according to the research firm DataQuick. REOs accounted for 58 percent of existing-home sales during the month, while short sales comprised 11 percent. With such a heavy presence of distress, the median home price in the Las Vegas metro area dropped to $115,000 in June - the lowest it's been since October 1995.

Housing prices increased 2 percent over the second quarter of 2011, according to the IAS360 House Price Index compiled by Integrated Asset Services (IAS). In contrast to the previous quarter, prices rose in all four of the U.S. Census regions. The smallest increase was in the West - a region hard-hit by the housing crisis - which reported a 0.1 percent rise. IAS attributes the recent gains, at least in part, to delays in foreclosure processing due to legal battles.