Home prices are rising, more underwater home owners are regaining equity, and home sales are on the rise, according to the Obama Housing Scorecard, released each month by the U.S. Department of Housing and Urban Development.
The August report showed that home prices continue to make strong gains while the number of underwater home owners has dropped by 42 percent since the beginning of 2012. The number of home owners who owe more on their mortgage than it is currently worth has dropped from 12.1 million to 7.1 million as of the second quarter of 2013. Home sales—for existing homes and new homes—continue to rebound as well.
However, the report also strikes a cautious note, underscoring the fact that housing market hasn’t returned to normal quite yet.
“As we regain stability in our housing markets, it is important to remember that we still have a long way to go in making sure that our housing finance system is strong for future generations,” says Kurt Usowski, HUD deputy assistant secretary for economic affairs.
The report notes that more than 1.7 million home owner assistance actions have taken place through the administration’s Making Home Affordable Program, including loan modifications and other foreclosure-mitigation efforts. But the administration continues to press mortgage servicers to improve their processes in helping struggling home owners, such as through better identification of home owners who could be helped through the program as well as improving upon the timeliness, accuracy, and detail of servicers communications with home owners.
“While there is significant progress, there is still more improvement needed in [mortgage] servicer behavior,” says Tim Massad, Treasury assistant secretary for financial stability. “And while the housing market has recovered substantially, there are still home owners struggling to avoid foreclosure and it is vital that we continue to try to help them.” Source: U.S. Department of Housing and Urban Development and “Obama Housing Scorecard: Housing faces long journey ahead,” HousingWire (Sept. 13, 2013)
Where Home Sellers Fared the Best This Summer
As the summer home buying season wraps up, realtor.com® reports which markets fared the best.
For home sellers who listed their homes in April, they tended to have the best chance to receive multiple offers as well as the shortest time on the market, according to realtor.com®.
Over the season, inventory levels increased, adding greater competition to the field and slowing the appreciation of prices in the majority of housing markets, realtor.com® found.
Realtor.com® compiled a list of the “Top 10 Housing Markets Where Home Owners Wish They’d Listed in April,” which includes housing markets that saw the largest jumps in inventory from April to August. Most of the markets are still seeing prices rise, but the sellers who took advantage by listing their homes in April tended to fare the best.
1. Orange County, Calif.
Change in inventory from April 2013 to August 2013: 100.3%
2. Los Angeles-Long Beach, Calif.
Change in inventory: 82.3%
3. Ventura, Calif.
Change in inventory: 75.1%
4. Riverside-San Bernardino, Calif.
Change in inventory: 70.3%
5. Oakland, Calif.
Change in inventory: 62.2%
6. Anchorage, Alaska
Change in inventory: 53.3%
7. Dayton-Springfield, Ohio
Change in inventory: 51.9%
8. San Jose, Calif.
Change in inventory: 47.6%
9. Seattle-Bellevue-Everett, Wash.
Change in inventory: 44.3%
10. Bakersfield, Calif.
Change in inventory: 38.7%
Source: “Housing Markets Where Home Listings Spiked This Summer,” realtor.com (Sept. 12, 2013)
For home sellers who listed their homes in April, they tended to have the best chance to receive multiple offers as well as the shortest time on the market, according to realtor.com®.
Over the season, inventory levels increased, adding greater competition to the field and slowing the appreciation of prices in the majority of housing markets, realtor.com® found.
Realtor.com® compiled a list of the “Top 10 Housing Markets Where Home Owners Wish They’d Listed in April,” which includes housing markets that saw the largest jumps in inventory from April to August. Most of the markets are still seeing prices rise, but the sellers who took advantage by listing their homes in April tended to fare the best.
1. Orange County, Calif.
Change in inventory from April 2013 to August 2013: 100.3%
2. Los Angeles-Long Beach, Calif.
Change in inventory: 82.3%
3. Ventura, Calif.
Change in inventory: 75.1%
4. Riverside-San Bernardino, Calif.
Change in inventory: 70.3%
5. Oakland, Calif.
Change in inventory: 62.2%
6. Anchorage, Alaska
Change in inventory: 53.3%
7. Dayton-Springfield, Ohio
Change in inventory: 51.9%
8. San Jose, Calif.
Change in inventory: 47.6%
9. Seattle-Bellevue-Everett, Wash.
Change in inventory: 44.3%
10. Bakersfield, Calif.
Change in inventory: 38.7%
Source: “Housing Markets Where Home Listings Spiked This Summer,” realtor.com (Sept. 12, 2013)
What Ranks High with Luxury Homebuyers
Luxury home owners and buyers place a high value on real estate, according to a new survey conducted by Better Homes and Gardens of 500 luxury home buyers.
In fact, the survey finds that 75 percent of luxury home buyers believe home ownership is a sounder investment than the stock market. What’s more, 57 percent of luxury home owners say home ownership is a bigger indicator of success than their job or title.
“The luxury consumer is considered a trendsetter in most industries, and to see the strong connection this consumer has with ‘home’ is very significant as we look at the real estate market as a whole,” says Sherry Chris, president and CEO of Better Homes and Gardens Real Estate LLC. “The luxury home buyer has high standards and invests the money, the time, and the commitment to making their home fit their needs and reflect who they are. It’s remarkable that they do this so well that nearly all -- 93 percent -- believe their house is the best one on their block.”
The survey revealed some of the following insights into the luxury home buyer and owner:
In fact, the survey finds that 75 percent of luxury home buyers believe home ownership is a sounder investment than the stock market. What’s more, 57 percent of luxury home owners say home ownership is a bigger indicator of success than their job or title.
“The luxury consumer is considered a trendsetter in most industries, and to see the strong connection this consumer has with ‘home’ is very significant as we look at the real estate market as a whole,” says Sherry Chris, president and CEO of Better Homes and Gardens Real Estate LLC. “The luxury home buyer has high standards and invests the money, the time, and the commitment to making their home fit their needs and reflect who they are. It’s remarkable that they do this so well that nearly all -- 93 percent -- believe their house is the best one on their block.”
The survey revealed some of the following insights into the luxury home buyer and owner:
- They desire multiple homes: Fifty-three percent say they prefer owning multiple “lifestyle” homes to support their lifestyle activities, such as skiing or attending the theatre. Fifty-eight percent of the luxury home buyers surveyed say they already owned multiple homes to support their lifestyle activities.
- They’re willing to sacrifice square footage for luxurious amenities: Sixty-percent of luxury home buyers surveyed said they would rather have as many upgrades as they can afford in their home rather than greater square footage. Ninety-four percent of those surveyed would be willing to give up 1,000 square feet of living space in their next home in order to get the amenities they most desire, such as living in a better neighborhood, living in a house with “character,” more land, access to dining and entertainment, and a shorter commute.
- They want a high-tech home. Sixty-six percent expressed a stronger desire for having a “smart” home than a “green” home. Eighty-seven percent said they would not even consider purchasing a home that wasn’t tech-friendly.
- They also value their outdoor spaces. Luxury homebuyers also placed a high value on outdoor amenities as must-have essentials in a home. For example, they expressed a big interest in having a garden oasis, outdoor fireplace or firepit, and a separate guest house outside of the main home.
- They turn to their real estate agent for guidance and greater insights. The luxury home buyer is looking for their real estate agent to provide them insight into the neighborhood lifestyle (65%), advance new listing notices (64%), advice on housing trends (55%), and support at a personal level throughout the buying process (53%), the survey finds.
New FHA Program Seeks to Return Foreclosed Borrowers to Homeownership
'Back to Work' Program Cuts Waiting Period to Qualify for a New Mortgage
In the aftermath of more than 2.5 million foreclosures, the Federal Housing Administration (FHA) is now offering a homeownership program that will put previously troubled borrowers on a fast-tracked return to the home ownership market. The new program known as "Back to Work – Extenuating Circumstance" cuts the standard three-year waiting period to only 12 months.
"We understand that families occasionally experience financial difficulties that are simply beyond their control," said Charles Coulter, HUD's Deputy Assistant Secretary for Single Family Housing. "We already have a policy allowing for exceptions to this waiting period when there is an extraordinary life event. This Mortgagee Letter is a targeted expansion of that policy.
"As part of FHA's ongoing mission, we want to make sure that qualified borrowers are not being unnecessarily shut out of the market," he added. "We're looking forward to working with our industry partners to strengthen our housing market, to protect FHA's insurance fund, and to make certain access to credit remains available for future generations of homeowners."
That's good news for borrowers who lost their home due to specific financial hardships but can now demonstrate they have regained previously lost financial ground. The list of eligible financial hardships reads like a list of housing crisis woes:
• Chapter 7 or Chapter 13 bankruptcy • Deed-in-lieu • Forbearance • Foreclosure • Loan modification • Loss of income, employment or both that totaled at least 20 percent of previous earnings for at least six months – including copies of applicable termination notices or changes in employment status • Pre-foreclosure sales • Short sales Additionally, consumers must also meet other verifiable measures to participate in the program: • Proof of borrower's current income – usually W-2 forms or federal tax returns that show the desired mortgage would be affordable and sustainable; • Credit history before and after the eligible hardship event that is free from late payments or other major credit issues, including rental housing payments and accounts delinquent by 30 days or more; • Credit score of at least 500; • Housing counseling by a HUD-approved counselor at least 30 days but no more than six months before submitting an FHA application.
For consumers meeting all of these criteria as well as other standing FHA mortgage guidelines, the Back to Work program is now available nationwide through FHA-approved lenders. Once participating lenders determine that mortgage applicants meet all eligibility and policy criteria, the same 3.5 percent minimum FHA down payment requirement will apply. Mortgage insurance and closing costs will also apply.
Only one FHA program is ineligible for the Back to Work program: reverse mortgages.
Earlier research by the Center for Responsible Lending found that more than 2.5 million homes were lost to foreclosure during the housing crisis. According to CoreLogic, a firm providing data and analysis to financial services companies and real estate professionals, the number of homes in some state of foreclosure dropped below the million-mark as of July 2013, to 949,000. This figure also represents a drop of 32 percent since July 2012.
Underwater mortgages, properties that are now worth less than their purchase price, also continue to haunt housing recovery. As of May 2013, Core Logic, a firm specializing in residential property information and analytics, found that 11 states had more than 1-in-5 underwater homes. The states with the seven highest numbers of underwater properties were Arizona, Florida, Georgia, Michigan, Nevada, California and Illinois.
As CRL has stated before, the housing crisis is not yet over. But programs that enable former troubled borrowers to regain the pride of home ownership and the chance to build family wealth have to be good news.
In the aftermath of more than 2.5 million foreclosures, the Federal Housing Administration (FHA) is now offering a homeownership program that will put previously troubled borrowers on a fast-tracked return to the home ownership market. The new program known as "Back to Work – Extenuating Circumstance" cuts the standard three-year waiting period to only 12 months.
"We understand that families occasionally experience financial difficulties that are simply beyond their control," said Charles Coulter, HUD's Deputy Assistant Secretary for Single Family Housing. "We already have a policy allowing for exceptions to this waiting period when there is an extraordinary life event. This Mortgagee Letter is a targeted expansion of that policy.
"As part of FHA's ongoing mission, we want to make sure that qualified borrowers are not being unnecessarily shut out of the market," he added. "We're looking forward to working with our industry partners to strengthen our housing market, to protect FHA's insurance fund, and to make certain access to credit remains available for future generations of homeowners."
That's good news for borrowers who lost their home due to specific financial hardships but can now demonstrate they have regained previously lost financial ground. The list of eligible financial hardships reads like a list of housing crisis woes:
• Chapter 7 or Chapter 13 bankruptcy • Deed-in-lieu • Forbearance • Foreclosure • Loan modification • Loss of income, employment or both that totaled at least 20 percent of previous earnings for at least six months – including copies of applicable termination notices or changes in employment status • Pre-foreclosure sales • Short sales Additionally, consumers must also meet other verifiable measures to participate in the program: • Proof of borrower's current income – usually W-2 forms or federal tax returns that show the desired mortgage would be affordable and sustainable; • Credit history before and after the eligible hardship event that is free from late payments or other major credit issues, including rental housing payments and accounts delinquent by 30 days or more; • Credit score of at least 500; • Housing counseling by a HUD-approved counselor at least 30 days but no more than six months before submitting an FHA application.
For consumers meeting all of these criteria as well as other standing FHA mortgage guidelines, the Back to Work program is now available nationwide through FHA-approved lenders. Once participating lenders determine that mortgage applicants meet all eligibility and policy criteria, the same 3.5 percent minimum FHA down payment requirement will apply. Mortgage insurance and closing costs will also apply.
Only one FHA program is ineligible for the Back to Work program: reverse mortgages.
Earlier research by the Center for Responsible Lending found that more than 2.5 million homes were lost to foreclosure during the housing crisis. According to CoreLogic, a firm providing data and analysis to financial services companies and real estate professionals, the number of homes in some state of foreclosure dropped below the million-mark as of July 2013, to 949,000. This figure also represents a drop of 32 percent since July 2012.
Underwater mortgages, properties that are now worth less than their purchase price, also continue to haunt housing recovery. As of May 2013, Core Logic, a firm specializing in residential property information and analytics, found that 11 states had more than 1-in-5 underwater homes. The states with the seven highest numbers of underwater properties were Arizona, Florida, Georgia, Michigan, Nevada, California and Illinois.
As CRL has stated before, the housing crisis is not yet over. But programs that enable former troubled borrowers to regain the pride of home ownership and the chance to build family wealth have to be good news.
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