Tag Archives: Home Prices

Illinois Governor Pat Quinn recently announced the new Mortgage Resolution Fund (MRF) created to permanently modify loans to affordable amounts. The MRF is being funded with $100 million from the state of Illinois and $445.7 million from the Hardest Hit Fund a fund established by the Obama Administration in 2010 to help families in markets hardest hit by the housing and economic crisis. Under the MRF, delinquent loans will be purchased from lenders at present value and modified according to current home values.

The Obama administration is setting the stage for a public-private collaboration to tackle the growing inventory of REO homes. On Wednesday, federal officials called on private investors and industry stakeholders to share their recommendations on how best to dispose of foreclosed homes held by Fannie Mae, Freddie Mac, and FHA. Together, the three hold nearly 250,000 REO homes. Federal officials believe the most effective tactic is to sell off pools of properties to responsible investors who will employ an REO-to-rental strategy.

Fewer foreclosed REO homes are changing hands, allowing home price indices to shed some of the weight that comes with deeply discounted property sales. But it hasn't been enough to change forecasts that home prices have further to fall still, according to Zillow. The company says foreclosure re-sales dropped to just 20 percent of total sales in June. For the second-quarter period ending that same month, Zillow recorded its smallest quarterly decline in national home prices in over four years - a drop of just 0.4 percent.

Fiserv, Inc. released its home price index Tuesday noting declines but predicting stabilization by the end of 2012. For the short-term, Fiserv sees continuing declines - at least until the end of the year. However, beginning in 2012, Fiserv predicts small gains in prices. Fiserv notes that the first quarter of 2011 showed a continuation of the double-dip trend started last year when demand waned after the expiration of the homebuyer tax credit. Price declines early this year were also driven by a jump in foreclosure sales.

A study released by Clear Capital Thursday reveals home prices continue to correct from winter's extended declines, edging up on the increase in sales activity that comes with warmer weather. But even recent gains off the record low experienced earlier this year have not been enough to change the broader housing picture, Clear Capital says. Its latest reading of national home prices shows an annual decline of 7.9 percent, with only a handful of markets in the Northeast bucking the trend.

Despite a declining share of REO and short sales, and a seasonal increase in non-distressed sales, CoreLogic says home prices in June came in 6.8 percent below June 2010. Even with fewer distressed properties changing hands, short sale and REO transactions are weighing heavy on the overall market numbers. CoreLogic's data show that when distressed sales are excluded from the equation, the year-over-year price decline narrows to 1.1 percent. On a monthly basis, CoreLogic reports that home prices edged up 0.7 percent from May to June.

The nation's housing crisis has forced unprecedented numbers of homeowners out of their homes, made for a difficult homebuying environment, and tainted many Americans' ideal of owning a home. These factors are taking their toll on homeownership in this country. The Census Bureau says homeownership in the United States has fallen to its lowest level in more than 13 years, slipping to 65.9 percent in the second quarter. The increase in the homeownership rate seen during the housing boom has been more than completely wiped out by the bust.

Economic activity continues to grow but the pace has moderated in many parts of the country, weighed down by a persistent weakness in the residential real estate sector, according to the latest market-gauging Beige Book from the Federal Reserve. Contacts in the Boston district said housing markets ""remain in the doldrums."" A pickup in sales of higher-priced homes was evident in the D.C. area. In the Kansas City region, they're seeing an increase in all-cash purchases of existing homes, while demand in the Dallas district was described as ""choppy.""

Median prices for REO and short sale transactions continue to decline. A new report from CoreLogic shows distressed home prices at the national level have fallen 10 percent since 2009. The company notes, however, that new foreclosure auction filings have dropped significantly since last October, and the industry's shadow inventory has been trimmed. With these two distressed sale drivers narrowing, CoreLogic says such transactions will likely begin to decline late in 2011 and into 2012.

The rise in foreclosures in recent years may lead to long-term vacancies, further exacerbating housing prices and the market as a whole, according to Stephan Whitaker, a Cleveland Federal Reserve Bank researcher. In a recent study, Whitaker determined a strong correlation between foreclosures and vacancy rates, suggesting foreclosure may permanently scar some homes. He found that foreclosed homes still have higher vacancy rates than neighboring houses two to five years after a sheriff's sale.