Any way you look at it–and just about everyone is looking at it–the housing market continues to recover from the depths of its 2007 crisis.
At its lowest point, more than 30 percent of homeowners owed lenders more than the value of their homes. Today, a handful of reports point to a healthier housing market, and analytic data generally agree.
Earlier this month, the Mortgage Bankers Association reported mortgage delinquencies continued their downward trend in the first quarter, to pre-housing crisis lows, although the foreclosure rate rose slightly. The MBA 1st Quarter National Delinquency Report said the delinquency rate for mortgage loans on one-to-four-unit residential properties fell to a seasonally adjusted rate of 4.63 percent of all loans outstanding at the end of the first quarter, down by 54 basis points from the fourth quarter and eight basis points lower than a year ago.
MBA reported the percentage of loans on which foreclosure actions started during the first quarter rose slightly to 0.28 percent, up three basis points from the fourth quarter but down two basis points from one year ago. The percentage of loans in the foreclosure process at the end of the first quarter fell to 1.16 percent, down 3 basis points from the fourth quarter and 23 basis points lower than a year ago. This was the lowest foreclosure inventory rate since third quarter 2006.
“In addition to the strong economy and increasing home equity levels, extended storm-related foreclosure moratoria continue to play a factor in keeping foreclosure inventory at historic lows,” said MBA Vice President of Industry Benchmarking and Research Marina Walsh.
So, how do others see the data? Zillow Inc., Seattle, yesterday reported the share of homeowners who owe more than the value of their home (i.e., “underwater”) fell to 9.1 percent, below 10 percent for the first time since the housing crisis.
“The typical U.S. home lost more than a quarter of its value when the market crashed, sending millions of homeowners into negative equity, when their homes’ values were lower than the balances on their mortgages,” the Zillow 2017 Q4 Negative Equity Report said. “Now, though, national home values are higher than ever, and many owners who held on to their homes throughout the housing crisis have resurfaced on their mortgages.”
Zillow noted nearly 4.5 million American homeowners still owe more on their mortgages than their homes are worth, of which 713,000 owe at least twice as much as their homes’ value. Additionally, one in seven homeowners with a mortgage (15.4 percent) have some equity in their home, but likely not enough to sell and comfortably use the proceeds for a down payment on another home.
“Scattered in neighborhoods across the country, the legacy of the mid-2000s housing bubble and bust lingers among the millions of Americans still underwater on their mortgages, trapped in their homes with no easy options to regain equity other than waiting,” said Zillow Senior Economist Aaron Terrazas. “Their struggles mean there are fewer homes on the market for homebuyers today.”
Zillow data largely match up with Black Knight, Jacksonville, Fla., whose latest monthly Loan Performance Report said nationally, the U.S. loan delinquency rate fell to 3.67 percent in April, down by 1.6 percent from March and down by 10.17 percent from a year ago.
Black Knight reported the U.S. foreclosure inventory rate fell to 0.61 percent in April, down by 2.26 percent from March and by 28.41 percent from a year ago. Foreclosure starts totaled 49,300 in April, down by 5.37 percent from March and by 6.63 percent a year ago.
And Black Knight data largely matched up with ATTOM Data Solutions, Irvine, Calif., which earlier this month said more than 5.2 million U.S. properties remained seriously underwater at the end of the first quarter, an improvement of nearly 300,000 from a year ago. The company’s quarterly US. Home Equity & Underwater report also said nearly 14 million U.S. properties with a mortgage were equity rich at the end of Q1 2018, up by more than 122,000 from a year ago.
The report said seriously underwater U.S. properties fell by more than 291,000 properties from a year ago, the smallest year-over-year drop since ATTOM began tracking in Q1 2013. The 5.2 million seriously underwater properties at the end of the first quarter represented 9.5 percent of all U.S. properties with a mortgage, up from 9.3 percent in the previous quarter but down from 9.7 percent a year ago.
And ATTOM data largely matched up with CoreLogic, Irvine, Calif., which earlier this month said 4.8 percent of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure) in February, representing an 0.2 percentage point decline in the overall delinquency rate compared to a year ago (5 percent).
CoreLogic said the foreclosure inventory rate fell to 0.6 percent, down 0.2 percentage points from 0.8 percent a year ago. Since August 2017, the foreclosure inventory rate has been steady at 0.6 percent, the lowest level since June 2007, when it was also 0.6 percent.