Posts Tagged ‘percent’

The US housing market may be entering a "third stage" of foreclosures according to the MBA's Chief Economist Jay Brinkman.

The initial fallout from subprime and option ARM mortgages constituted the first stage.  The second stage was seen when systemic challenges posed to the financial system by evolving recession manifested themselves in the housing market (credit availability down, prices down, demand down, all at a time of unprecedented inventory of homes).  Now, in the third stage, we are seeing the first signs of potential recovery.

The press conference accompanied the release of the MBA's First Quarter National Delinquency Survey released by MBA which showed that, in the first quarter the seasonally adjusted foreclosure rate was 8.32 percent, an increase of seven basis points from the previous quarter but down 174 basis points from the same period in 2010.  The non-seasonally adjusted rate was 7.79 percent, down 117 basis points from Q4. The increase in the seasonally adjusted rate was due to a nine basis point bump in the 30-day delinquent category, now at 3.35 percent.  The delinquency rate includes loans that are at least one payment past due but does not include loans in foreclosure.

Brinkmann said that national foreclosure rates are misleading because they are dominated by areas that are large and have outsized problems such as Florida.  The numbers of homes in foreclosure in Florida are larger than the combined total of home loans outstanding in 22 U.S. states and the top five states in terms of foreclosures account for more than half of the nation's total.  If those states are removed from the equation he said, there are clear signs of a market on the mend.  In Q1 38 states had foreclosure rates below the national average.

Short-term delinquencies remain at pre-recession levels. Loans 90 days or more delinquent have now dropped for five straight quarters and are at their lowest level since the beginning of 2009, 3.62 percent.  Foreclosure starts are at 1.08 percent, the lowest level since the end of 2008 following a 19 basis point drop, the second largest ever.  The percentage of loans somewhere in foreclosure is down from last quarter's record high of 4.64 percent to 4.52 percent, one of the largest drops MBA has ever seen although, Brinkmann said, the reasons for the drop differ from market to market.  The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 8.10 percent, a decrease of 50 basis points from last quarter, and a decrease of 144 basis points from the first quarter of last year.

The combined percentage of loans in foreclosure or at least one payment past due was 12.31 percent on a non-seasonally adjusted basis, a 129 basis point decline from 13.60 percent last quarter.

By loan type the seasonally adjusted rate increased from 5.48 percent to 5.50 percent from the fourth quarter for prime loans, from 23.09 percent to 24.01 percent for subprime loans, 6.67 percent to 6.93 percent for VA loans.  FHA rates declined 24 percent to 12.03 percent.  On a seasonally adjusted basis the rate expressed in basis points declined 182 for prime, 320 for subprime, 112 for FHA, and 103 for VA loans on a year-over-year basis.

For the first time the Delinquency Report breaks down loans by type and year of origination and compares the incidence of delinquency for each type against its presence in the portfolio. Loans of all types originated prior to 2005 make up nearly one third of the existing portfolio but constitute only 21 percent of delinquent loans.  In each subsequent year until 2009 the incidence of delinquencies represents a higher share of the portfolio than do originations from that period. Eleven percent of the loans originated in 2005 but 17 percent of delinquencies are from that loan vintage.  In 2006 is was 11 percent v 26 percent; in 2007 10 percent against 22 percent, while in 2008 originations shrunk to 8 percent but 9 percent of the delinquencies are from that group.   

"Of particular importance is that the drop in the percentage of loans 90 days or more past due was driven by improving numbers for loans originated between 2005 and 2007. These are the loans that drove the mortgage market collapse and now represent about 31 percent of loans outstanding but 65 percent of the loans seriously delinquent. Given that loans originated during this period are now past the point where loans normally default, and that loans originated since then generally have better credit quality, mortgage performance should continue to improve," Brinkmann said.

The rate of foreclosure activity in judicial states is continuing to rise and is now near 7 percent while the rate is dropping in non-judicial states and is now close to 3 percent.  This information is confounded by the actual states that fall into the two categories.  Only three non-judicial states rank above the national average and Florida with over a 14 percent rate is a judicial state.  However, Brinkmann noted that the states with the biggest increases in the number of loans in foreclosure were Florida, New Jersey, and Illinois, all states with judicial processes while the six states with the largest decreases were California, Arizona, and Michigan, non-judicial jurisdictions.  However, all six States recorded declines in 90+ day delinquencies and in foreclosure starts. It is the laws in judicial states that lengthen the timeline and increase the number of loans that sit in foreclosure, Brinkmann said.

On a seasonally adjusted basis, the overall delinquency rate increased for all but FHA loans, with the biggest increases coming in the subprime categories. The seasonally adjusted delinquency rate stood at 4.59 percent for prime fixed loans, 11.25 percent for prime ARM loans, 22.04 percent for subprime fixed loans, 26.31 percent for subprime ARM loans, 12.03 percent for FHA loans, and 6.93 percent for VA loans.

The percentage of loans in foreclosure, also known as the foreclosure inventory rate, decreased 12 basis points overall to 4.52. The foreclosure inventory rate for prime fixed loans, which make up the largest portion of the survey (accounting for 63 percent of all loans outstanding), decreased eight basis points to 2.59 percent. The rate for prime ARM loans decreased 69 basis points from last quarter to 9.53 percent. Subprime fixed loans saw an increase of 67 basis points to 10.53 percent, which is a new record high in the survey. The rate for subprime ARM loans increased 26 basis points to 22.26 percent, while the rate for FHA loans increased five basis points to 3.35 percent and the rate for VA loans increased four basis points to 2.39 percent.

The foreclosure starts rate decreased 16 basis points for prime fixed loans to 0.68 percent, 42 basis points for prime ARM loans to 2.38 percent, 19 basis points for subprime fixed to 2.56 percent and 57 basis points for subprime ARMs to 3.67 percent. The foreclosure starts rate also decreased nine basis points for FHA loans to 0.93 percent and 15 basis points for VA loans to 1.02 percent.  

In answer to a reporter's question about th possibility banks were holding REO off of the market, Brinkmann said there might be isolated instances where a bank has determined a property would not sell at any time, but certainly no concerted effort in that respect.  There is, he said, instability in cartels that do not allow that type of conspiracy to have any success.

The US housing market may be entering a "third stage" of foreclosures according to the MBA's Chief Economist Jay Brinkman.

The initial fallout from subprime and option ARM mortgages constituted the first stage.  The second stage was seen when systemic challenges posed to the financial system by evolving recession manifested themselves in the housing market (credit availability down, prices down, demand down, all at a time of unprecedented inventory of homes).  Now, in the third stage, we are seeing the first signs of potential recovery.

The press conference accompanied the release of the MBA's First Quarter National Delinquency Survey released by MBA which showed that, in the first quarter the seasonally adjusted foreclosure rate was 8.32 percent, an increase of seven basis points from the previous quarter but down 174 basis points from the same period in 2010.  The non-seasonally adjusted rate was 7.79 percent, down 117 basis points from Q4. The increase in the seasonally adjusted rate was due to a nine basis point bump in the 30-day delinquent category, now at 3.35 percent.  The delinquency rate includes loans that are at least one payment past due but does not include loans in foreclosure.

Brinkmann said that national foreclosure rates are misleading because they are dominated by areas that are large and have outsized problems such as Florida.  The numbers of homes in foreclosure in Florida are larger than the combined total of home loans outstanding in 22 U.S. states and the top five states in terms of foreclosures account for more than half of the nation's total.  If those states are removed from the equation he said, there are clear signs of a market on the mend.  In Q1 38 states had foreclosure rates below the national average.

Short-term delinquencies remain at pre-recession levels. Loans 90 days or more delinquent have now dropped for five straight quarters and are at their lowest level since the beginning of 2009, 3.62 percent.  Foreclosure starts are at 1.08 percent, the lowest level since the end of 2008 following a 19 basis point drop, the second largest ever.  The percentage of loans somewhere in foreclosure is down from last quarter's record high of 4.64 percent to 4.52 percent, one of the largest drops MBA has ever seen although, Brinkmann said, the reasons for the drop differ from market to market.  The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 8.10 percent, a decrease of 50 basis points from last quarter, and a decrease of 144 basis points from the first quarter of last year.

The combined percentage of loans in foreclosure or at least one payment past due was 12.31 percent on a non-seasonally adjusted basis, a 129 basis point decline from 13.60 percent last quarter.

By loan type the seasonally adjusted rate increased from 5.48 percent to 5.50 percent from the fourth quarter for prime loans, from 23.09 percent to 24.01 percent for subprime loans, 6.67 percent to 6.93 percent for VA loans.  FHA rates declined 24 percent to 12.03 percent.  On a seasonally adjusted basis the rate expressed in basis points declined 182 for prime, 320 for subprime, 112 for FHA, and 103 for VA loans on a year-over-year basis.

For the first time the Delinquency Report breaks down loans by type and year of origination and compares the incidence of delinquency for each type against its presence in the portfolio. Loans of all types originated prior to 2005 make up nearly one third of the existing portfolio but constitute only 21 percent of delinquent loans.  In each subsequent year until 2009 the incidence of delinquencies represents a higher share of the portfolio than do originations from that period. Eleven percent of the loans originated in 2005 but 17 percent of delinquencies are from that loan vintage.  In 2006 is was 11 percent v 26 percent; in 2007 10 percent against 22 percent, while in 2008 originations shrunk to 8 percent but 9 percent of the delinquencies are from that group.   

"Of particular importance is that the drop in the percentage of loans 90 days or more past due was driven by improving numbers for loans originated between 2005 and 2007. These are the loans that drove the mortgage market collapse and now represent about 31 percent of loans outstanding but 65 percent of the loans seriously delinquent. Given that loans originated during this period are now past the point where loans normally default, and that loans originated since then generally have better credit quality, mortgage performance should continue to improve," Brinkmann said.

The rate of foreclosure activity in judicial states is continuing to rise and is now near 7 percent while the rate is dropping in non-judicial states and is now close to 3 percent.  This information is confounded by the actual states that fall into the two categories.  Only three non-judicial states rank above the national average and Florida with over a 14 percent rate is a judicial state.  However, Brinkmann noted that the states with the biggest increases in the number of loans in foreclosure were Florida, New Jersey, and Illinois, all states with judicial processes while the six states with the largest decreases were California, Arizona, and Michigan, non-judicial jurisdictions.  However, all six States recorded declines in 90+ day delinquencies and in foreclosure starts. It is the laws in judicial states that lengthen the timeline and increase the number of loans that sit in foreclosure, Brinkmann said.

On a seasonally adjusted basis, the overall delinquency rate increased for all but FHA loans, with the biggest increases coming in the subprime categories. The seasonally adjusted delinquency rate stood at 4.59 percent for prime fixed loans, 11.25 percent for prime ARM loans, 22.04 percent for subprime fixed loans, 26.31 percent for subprime ARM loans, 12.03 percent for FHA loans, and 6.93 percent for VA loans.

The percentage of loans in foreclosure, also known as the foreclosure inventory rate, decreased 12 basis points overall to 4.52. The foreclosure inventory rate for prime fixed loans, which make up the largest portion of the survey (accounting for 63 percent of all loans outstanding), decreased eight basis points to 2.59 percent. The rate for prime ARM loans decreased 69 basis points from last quarter to 9.53 percent. Subprime fixed loans saw an increase of 67 basis points to 10.53 percent, which is a new record high in the survey. The rate for subprime ARM loans increased 26 basis points to 22.26 percent, while the rate for FHA loans increased five basis points to 3.35 percent and the rate for VA loans increased four basis points to 2.39 percent.

The foreclosure starts rate decreased 16 basis points for prime fixed loans to 0.68 percent, 42 basis points for prime ARM loans to 2.38 percent, 19 basis points for subprime fixed to 2.56 percent and 57 basis points for subprime ARMs to 3.67 percent. The foreclosure starts rate also decreased nine basis points for FHA loans to 0.93 percent and 15 basis points for VA loans to 1.02 percent.  

In answer to a reporter's question about th possibility banks were holding REO off of the market, Brinkmann said there might be isolated instances where a bank has determined a property would not sell at any time, but certainly no concerted effort in that respect.  There is, he said, instability in cartels that do not allow that type of conspiracy to have any success.

Americans are slightly more upbeat about owning a home and the housing market in general than they were at the end of 2010, according to the latest National Housing Survey released by Fannie Mae.  However, they still lack confidence in the overall economy.

"Despite moderate signs of improvement in the housing market and the overall economy, consumer attitudes continue to be shaped by ongoing concerns about the recovery and their own financial situations," said Doug Duncan, Vice President and Chief Economist of Fannie Mae. "Uncertainty regarding the improving labor market, expectations of little home price and interest rate movement, and rising household expenses has left consumers feeling less financially secure and translates into weak mortgage demand. While we have seen indications of improving economic activity in recent months, especially the strengthening of private sector employment, consumers' attitudes improved only marginally, and in some areas not at all, from a year ago, reflecting the continued unevenness and uncertainty of this recovery."

One-third of respondents think the U.S. economy is on the right track but this is up from 29 percent last quarter and is the highest percentage recorded in the survey to date.  When it comes to housing prices, 30 percent expect prices to improve over the next year, up four points from Q4 while 48 percent think they will remain the same and 17 percent expect further losses.  On average the expectation was for a 0.9 percent increase compared to an estimate of 0.4 percent in the previous survey.  Rents are expected to increase by 43 percent of respondents compared to 39 percent in Q4 and the average increase is expected to be 3.2 percent up from 2.8 percent last quarter.

Americans cite income, credit history and down payment as the biggest obstacles to homeownership with credit history being the top reason given by renters.  Seventy-one percent of delinquent borrowers and 41 percent of renters feel their income is insufficient to meet their current expenses.

Sixty-seven percent of respondents believe it is a good time to buy a house compared to 65 percent in the last survey but three percentage points below the responses in the first quarter of 2010.  Sixty-six percent said they believe buying a home is a safe investment, an improvement of 2 points since Q4 2010 but 17 percent below the responses in 2003.  Even though opinions of the safety of homeownership have declined fairly steadily since the 2003 survey, 57 percent still feel that a home has potential as an investment and outranks other alternatives.

Among all respondents buying a home was thought superior to renting by 87 percent, an increase of 3 points from Q4.  This opinion however was shared by only 74 percent of renters, a decrease of 13 points in one quarter.

As in the last survey, respondents continue to rank non-financial considerations such as having a good place to raise and educate children (78 percent) and safety (76 percent) as driving the desire to own.  Only 63 percent listed the perception that renting is a poor investment.

Less than half (44 percent) of homeowners think their home is worth at least 20 percent more than they paid for it, down from 46 percent in June and 51 percent in January of last year.  The number of homeowners who believe their mortgages are underwater has dropped from 30 percent to 23 percent but the number of homeowners who say they are stressed by this has increased from 35 to 46 percent.  Still, 90 percent of those who are underwater have not considered defaulting on their mortgage but 27 percent think it is OK to do so if faced by financial distress.  This is an increase of 13 points since the first quarter of 2010.  Most (87 percent) of Americans disapprove of defaulting even if the mortgage is underwater or the owner is facing financial distress, a number that remains fairly constant.

Only 20 percent of those surveyed said their income has increased significantly over the last year while 59 percent reported it essentially unchanged and 47 percent said it is significantly lower.  When asked if they expect this aspect of their lives to improve over the next year 42 percent said yes, an increase of 2 points while 15 percent, a decrease of 2 points said they expected it to get worse.

Monthly household expenses are significantly higher than a year ago for 40 percent of respondents, up from 34 percent last quarter and 31 percent a year ago.  Among delinquent borrowers 47 percent reported higher expenses.  The report noted that there was a 9 point spike in March in the number of all Americans reporting higher expenses compared to the previous two months in the quarter.

Among delinquent borrowers one-third have considered defaulting on their mortgages compared to only 5 percent of all mortgage holders and 20 percent said they have seriously considered it.  Forty-four percent of delinquent borrowers say they would be more likely to rent their next home than buy, up 4 points from one year earlier.  The average delinquent borrower pays 11.6 percent more of his income on mortgage payments than all mortgage borrowers.

A majority of renters (65 percent) say they would buy at some point in the future even though they are more likely to continue renting after their next move; 31 percent say they will always rent, down 3 points from last quarter.  Four out of five renters say that buying a home would entail making a financial sacrifice and 61 percent of minority respondents called it a "great deal" of sacrifice.

Americans cite income, credit history and down payment as the biggest obstacles to homeownership with credit history being the top reason given by renters.  Seventy-one percent of delinquent borrowers and 41 percent of renters feel their income is insufficient to meet their current expenses.

African Americans are more optimistic about the survey topics than the general public; 61 percent expect their personal finances to improve in the next year compared to 42 percent of the general population and 44 percent think the economy is on the right track compared to 33 percent of the larger sample.  Hispanics showed similar optimism with 59 percent expecting an improvement in personal finances and 74 percent viewing home ownership as a good way to build up wealth compared to 59 percent of the general population.

Generation Y respondents, those 18 to 34 years of age, were also more upbeat than others with 59 percent expecting an improvement in personal finances and 62 percent perceiving home ownership as a safe investment.     

Fannie Mae first conducted this survey in 2003 and has conducted it quarterly since the beginning of last year.  The current survey covers the first quarter of 2011 and involves telephone interviews with 3,403 Americans over the age of 18.  A 3,003 case random sample included 781 outright homeowners, 841 renters and 1,261 mortgage borrowers, 297 of whom self identified as underwater, i.e. owing at least 5 percent more on their mortgage than the value of their home.  There was an additional random oversample of 400 delinquent borrowers included in the survey.

Good news college grads. As you and an estimated 1.6 million of your classmates graduate, you’ll be facing the best job market for entry-level positions since 2008. According to the National Association of Colleges and Employers (NACE), employers indicate they plan to hire 19.3 percent more graduates in 2010-11 than they did in 2009-10, especially in certain technical and finance fields. Chances are, if you’re nabbing a new job, you probably need a new place to live.

According to the NACE, the average starting salary for a college graduate is $50,034. This figure depends on the field a grad enters: those with business majors will earn on average $44,000 and liberal arts majors will earn a starting average of $35,000.

To find a few  rental homes for grads, we rounded down to a $40,000 take-home salary, which ends up being about $3,300 per month. It’s recommended that people don’t pay rent that greatly exceeds 25 percent of their monthly income, so we found some post-college worthy rentals across the county for around $833 a month in just a few of the cities that have job opportunities for a new grad.

And of course if none of these options seem palatable, there’s always the option of finding a roommate, or doing what 85 percent of 2009 college grads did: move home.

Houston:

5129 Claremont St Houston TX (above)
For Rent: $550/month

This adorable 2-bedroom Houston rental is within three miles of the downtown core. The home features an updated bathroom with new tile flooring, and new carpeting in the master bedroom.

According to 2010 Census data, Houston is one of the fastest growing cities in America, growing 7.5 percent since 2000. This growth was fueled by a strong job market, with March’s unemployment rate hitting at 8.3 percent, below the U.S.’ current jobless rate of 9 percent. Houston is also one of the most affordable cities for a metro area its size. According to payscale.com, Houston’s cost of living hits about 10 percent below the national average.

Austin

6005 South Congress Austin, TX (above)
For Rent: $735/month

This updated apartment includes a front-loading washer and dryer, as well as a new pool and gym within the complex. Fan of local Tex-Mex chain Trudy’s? It’s also within walking distance of this Austin rental.

As Houston’s hipper younger brother, not only is the Texas capital the center of indie music, hosting South by Southwest (SXSW) each year, but it’s growing rapidly as tech companies move in to take advantage of the low overhead. With below-average unemployment rates, 6.8 percent as of March 2011, and a low cost of living, Austin is perfect for those renting right out of college.

Columbus

1696 Sale Rd Columbus OH
For Rent: $850/month

This charming Columbus rental is situated just outside downtown and includes 3 bedrooms, hardwood floors and a two-car garage.

Columbus’ low unemployment rate of 7.6 percent combined with a relatively low cost of living makes it a good place for recent college graduates. The home to one of the country’s largest colleges, Ohio State University, the city is a vibrant place to live, claiming to be a “big city with a small-town feel.”

Minneapolis

3329 2nd Ave S Apt 5 Minneapolis, MN
For Rent: $850/month

This Minneapolis rental was converted from an historic home to a 2-bedroom apartment. It includes an updated bathroom as well as new maple cabinets and new windows.

Listed by Forbes as one of the best places to find employment this spring, the city has a low unemployment rate of 6.8 percent. As one of the most literate cities in the U.S. and the third largest theater market, Minneapolis has turned into a cultural center and great place for college grads.

Seattle

2441 8th Ave N Apt C Seattle WA (above)
For Rent: $895/month

This 1-bedroom, 1-bath apartment is located only minutes outside the downtown core, and is walking distance to shops in Seattle’s hip Fremont neighborhood. With hardwood floors, coved ceilings and views of Lake Union, this apartment is a perfect first place.

Seattle has a higher than average living cost, yet it has continued to attract college grads; 52.5 percent of the population has a bachelor’s degree or higher. Amazon, Starbucks, Microsoft, and, of course, Zillow, are all located in Seattle, and are hiring.

Salt Lake City

1155 Brickyard Rd Apt 903 Salt Lake City UT (above)
For Rent: $845/month

This 2-bedroom, 1.5-bath 1,700-sq ft condo is located in the hip Sugar House neighborhood, which is minutes away from downtown. The Salt Lake City apartment includes a fireplace, new appliances and free parking in a covered garage.

Utah’s historical capital is not only growing, but it boasts a low unemployment rate of 7.3 percent. Salt Lake City also has a relatively young population; 31 percent are between the ages of 20 and 34.

San Jose

124 Rancho Dr San Jose CA (above)
For Rent/$700

Unfortunately, if you’re looking for a San Jose rental under a grand, you’re going to end up in a studio. Although small, this light-filled apartment was recently remodeled and is minutes from downtown San Jose.

Even though the city has a relatively high unemployment rate of 10.6 percent and a high cost of living,San Jose continues to grow due to a strong technology-orientated economy. San Jose is the self-proclaimed capital of Silicon Valley and the home of Adobe, Cisco Systems, eBay as well as located less than 20 minutes from Google headquarters.

Copyright: Zillow.com

America's household debt level ticked upward for the first time in 10 quarters during the first three months of 2011 according to a report released by the Federal Reserve Bank of New York.  Households, which had reduced debt by more than $1.03 trillion since its peak level of $12.5 trillion in Q3 2008, added $33 billion (0.3 percent) to the total debt tally during the first quarter of 2011.   

Much of the increase was due to a fractional uptick in mortgage and home equity lines of credit (HELOC), which comprise 74 percent of the nation's debt burden.  Despite the slight increase, mortgage debt and HELOC obligations are down from 2008 peaks by 8.1 percent and 9.9 percent respectively.

Other forms of consumer debt fell by $30 billion or about 1 percent during the quarter.  Non-real estate debt is now $2.29 trillion, a decline of 9.6 percent from the Q4 2008 peak.  Credit card limits increased slightly for the first time in 10 quarters while the number of open credit card accounts remained level at around 379 million.  At the peak, almost 500 million credit cards were in use and 270 million accounts have been closed against about 160 million new accounts opened.  Balances on outstanding credit card accounts are about 20 percent below peak levels. 

While credit card accounts have plummeted in number since the start of the recession and the count of mortgages, HELOCs and auto loans have remained relatively unchanged, the number of student loans has continued to climb, increasing by about 50 percent since Q1 of 2008.  The number of credit account inquiries within six months, an indicator of consumer credit demand, fell 3.5 percent after a string of three consecutive increases. 

Total household delinquency rates continued to decline.  As of March 31, 10.5 percent of outstanding debt was in some stage of delinquency, down from 10.8 percent at the end of the fourth quarter of 2010 and 11.9 percent a year ago.  This was the fifth consecutive quarter the delinquency rate shrunk.  About $1.2 trillion of consumer debt is currently delinquent and $890 billion is at least 90 days overdue.  Both of these measures of delinquency have declined by 15 percent year-over-year.

Some 2.4 percent of mortgage balances that were current at the beginning of the quarter had transitioned into delinquency by the end; the second straight quarter this measure improved.  The roll from early to serious delinquency also slowed to 28 percent from 30 percent.  This is the lowest roll rate since the third quarter of 2003.  There was also an increase in the cure rate - former delinquent loans that become current - to 32 percent from around 25 percent in mid 2010.

New foreclosures which the Federal Reserve defines as the number of individuals rather than properties receiving a first foreclosure notice, numbered around 368,000, a 17.7 percent decrease from the fourth quarter level.  This number is a little hard to assess as a person with foreclosures on two loans (even if filed during different quarters) would be counted only once while a property with two owners would be counted twice.

Arizona, California, Florida, and Nevada have the nation's highest delinquency and foreclosure rates but the Fed notes that their rates are falling faster on average than in the other states.  An exception is Nevada where new bankruptcies and foreclosures are dropping but general measures of delinquencies continue to soar.

New bankruptcies appeared on the credit reports of 434,000 individuals compared to 500,000 in the previous quarter, a decrease of 13.3 percent.  New bankruptcies were down 6.4 percent from the level one year earlier.

America's household debt level ticked upward for the first time in 10 quarters during the first three months of 2011 according to a report released by the Federal Reserve Bank of New York.  Households, which had reduced debt by more than $1.03 trillion since its peak level of $12.5 trillion in Q3 2008, added $33 billion (0.3 percent) to the total debt tally during the first quarter of 2011.   

Much of the increase was due to a fractional uptick in mortgage and home equity lines of credit (HELOC), which comprise 74 percent of the nation's debt burden.  Despite the slight increase, mortgage debt and HELOC obligations are down from 2008 peaks by 8.1 percent and 9.9 percent respectively.

Other forms of consumer debt fell by $30 billion or about 1 percent during the quarter.  Non-real estate debt is now $2.29 trillion, a decline of 9.6 percent from the Q4 2008 peak.  Credit card limits increased slightly for the first time in 10 quarters while the number of open credit card accounts remained level at around 379 million.  At the peak, almost 500 million credit cards were in use and 270 million accounts have been closed against about 160 million new accounts opened.  Balances on outstanding credit card accounts are about 20 percent below peak levels. 

While credit card accounts have plummeted in number since the start of the recession and the count of mortgages, HELOCs and auto loans have remained relatively unchanged, the number of student loans has continued to climb, increasing by about 50 percent since Q1 of 2008.  The number of credit account inquiries within six months, an indicator of consumer credit demand, fell 3.5 percent after a string of three consecutive increases. 

Total household delinquency rates continued to decline.  As of March 31, 10.5 percent of outstanding debt was in some stage of delinquency, down from 10.8 percent at the end of the fourth quarter of 2010 and 11.9 percent a year ago.  This was the fifth consecutive quarter the delinquency rate shrunk.  About $1.2 trillion of consumer debt is currently delinquent and $890 billion is at least 90 days overdue.  Both of these measures of delinquency have declined by 15 percent year-over-year.

Some 2.4 percent of mortgage balances that were current at the beginning of the quarter had transitioned into delinquency by the end; the second straight quarter this measure improved.  The roll from early to serious delinquency also slowed to 28 percent from 30 percent.  This is the lowest roll rate since the third quarter of 2003.  There was also an increase in the cure rate - former delinquent loans that become current - to 32 percent from around 25 percent in mid 2010.

New foreclosures which the Federal Reserve defines as the number of individuals rather than properties receiving a first foreclosure notice, numbered around 368,000, a 17.7 percent decrease from the fourth quarter level.  This number is a little hard to assess as a person with foreclosures on two loans (even if filed during different quarters) would be counted only once while a property with two owners would be counted twice.

Arizona, California, Florida, and Nevada have the nation's highest delinquency and foreclosure rates but the Fed notes that their rates are falling faster on average than in the other states.  An exception is Nevada where new bankruptcies and foreclosures are dropping but general measures of delinquencies continue to soar.

New bankruptcies appeared on the credit reports of 434,000 individuals compared to 500,000 in the previous quarter, a decrease of 13.3 percent.  New bankruptcies were down 6.4 percent from the level one year earlier.

Yet another study has been released which indicates home prices are trending lower.  CoreLogic's March Home Price Index (HPI) pegs that decline at 7.5 percent in March compared to the HPI in March 2010.  March was the 8th straight month when the HPI was lower than it was during the same period a year earlier. 

“Last year the First Time Homebuyer Tax Credit pulled a significant number of sales forward and, to an extent, artificially supported prices. So, absent the tax credit, it is understandable that we see prices continue to decline when compared with last year,” said Mark Fleming, chief economist with CoreLogic. “As we move further away from that support, we will see a leveling of prices and eventually organic improvements in the market.”

The CoreLogic HPI is a repeat-sales index that tracks increases and decreases in sales prices for the same set of homes over-time.  The data includes distressed sales, both short sales and sales of bank-owned real estate. The decline in home prices is not nearly so dramatic, however, when those distressed sales are eliminated from the mix.  Excluding those sales, the HPI for March is down 0.96 percent year-over-year.  The total HPI figure in February had declined 5.8 percent from the previous year but, again, when distressed sales were removed the change was only -2.0 percent.

The same is true across the states.  Without short and REO sales included in the data, 19 states experienced actual increases in March.  The five states with the highest appreciation based on the total HPI were West Virginia (+7.7 percent), North Dakota (+4.1 percent), New York (+3.5 percent), Alaska (+2.4 percent) and Maine (+0.4 percent.)  When distressed sales are excluded the highest appreciation occurred in West Virginia (+11.5 percent), New York (+4.5 percent), Mississippi (+4.4 percent), North Dakota (+4.1 percent) and Alaska (+4.0 percent.)

On the other end of the scale, those states with the greatest depreciation including distressed sales were Idaho (-13.3 percent), Arizona (-12.3 percent), Michigan (11.9 percent), Florida (-0.6 percent) and Illinois (-10.6 percent).  When distressed sales are eliminated there is a pronounced shift; Nevada (-8.9 percent), Idaho (-8.8 percent), Arizona (-6.6 percent), Maine (-6.6 percent) and Minnesota (-5 percent).  One must assume there was an anomaly in Maine probably related to sample size that allowed it to rank among the highest states in both appreciation and depreciation.

The national HPI has depreciated 34.8 percent since the peak in April 2006.  When distressed sales are excluded from the data the drop is 22.5 percent.

Among the top 100 Core Based Statistical Areas (out of 592 covering 86 percent of the U.S. population) 92 declined between March 2010 and March 2011.  A year-over-year drop was recorded by only 85 of the areas in February.

Yet another study has been released which indicates home prices are trending lower.  CoreLogic's March Home Price Index (HPI) pegs that decline at 7.5 percent in March compared to the HPI in March 2010.  March was the 8th straight month when the HPI was lower than it was during the same period a year earlier. 

“Last year the First Time Homebuyer Tax Credit pulled a significant number of sales forward and, to an extent, artificially supported prices. So, absent the tax credit, it is understandable that we see prices continue to decline when compared with last year,” said Mark Fleming, chief economist with CoreLogic. “As we move further away from that support, we will see a leveling of prices and eventually organic improvements in the market.”

The CoreLogic HPI is a repeat-sales index that tracks increases and decreases in sales prices for the same set of homes over-time.  The data includes distressed sales, both short sales and sales of bank-owned real estate. The decline in home prices is not nearly so dramatic, however, when those distressed sales are eliminated from the mix.  Excluding those sales, the HPI for March is down 0.96 percent year-over-year.  The total HPI figure in February had declined 5.8 percent from the previous year but, again, when distressed sales were removed the change was only -2.0 percent.

The same is true across the states.  Without short and REO sales included in the data, 19 states experienced actual increases in March.  The five states with the highest appreciation based on the total HPI were West Virginia (+7.7 percent), North Dakota (+4.1 percent), New York (+3.5 percent), Alaska (+2.4 percent) and Maine (+0.4 percent.)  When distressed sales are excluded the highest appreciation occurred in West Virginia (+11.5 percent), New York (+4.5 percent), Mississippi (+4.4 percent), North Dakota (+4.1 percent) and Alaska (+4.0 percent.)

On the other end of the scale, those states with the greatest depreciation including distressed sales were Idaho (-13.3 percent), Arizona (-12.3 percent), Michigan (11.9 percent), Florida (-0.6 percent) and Illinois (-10.6 percent).  When distressed sales are eliminated there is a pronounced shift; Nevada (-8.9 percent), Idaho (-8.8 percent), Arizona (-6.6 percent), Maine (-6.6 percent) and Minnesota (-5 percent).  One must assume there was an anomaly in Maine probably related to sample size that allowed it to rank among the highest states in both appreciation and depreciation.

The national HPI has depreciated 34.8 percent since the peak in April 2006.  When distressed sales are excluded from the data the drop is 22.5 percent.

Among the top 100 Core Based Statistical Areas (out of 592 covering 86 percent of the U.S. population) 92 declined between March 2010 and March 2011.  A year-over-year drop was recorded by only 85 of the areas in February.

Yet another study has been released which indicates home prices are trending lower.  CoreLogic's March Home Price Index (HPI) pegs that decline at 7.5 percent in March compared to the HPI in March 2010.  March was the 8th straight month when the HPI was lower than it was during the same period a year earlier. 

“Last year the First Time Homebuyer Tax Credit pulled a significant number of sales forward and, to an extent, artificially supported prices. So, absent the tax credit, it is understandable that we see prices continue to decline when compared with last year,” said Mark Fleming, chief economist with CoreLogic. “As we move further away from that support, we will see a leveling of prices and eventually organic improvements in the market.”

The CoreLogic HPI is a repeat-sales index that tracks increases and decreases in sales prices for the same set of homes over-time.  The data includes distressed sales, both short sales and sales of bank-owned real estate. The decline in home prices is not nearly so dramatic, however, when those distressed sales are eliminated from the mix.  Excluding those sales, the HPI for March is down 0.96 percent year-over-year.  The total HPI figure in February had declined 5.8 percent from the previous year but, again, when distressed sales were removed the change was only -2.0 percent.

The same is true across the states.  Without short and REO sales included in the data, 19 states experienced actual increases in March.  The five states with the highest appreciation based on the total HPI were West Virginia (+7.7 percent), North Dakota (+4.1 percent), New York (+3.5 percent), Alaska (+2.4 percent) and Maine (+0.4 percent.)  When distressed sales are excluded the highest appreciation occurred in West Virginia (+11.5 percent), New York (+4.5 percent), Mississippi (+4.4 percent), North Dakota (+4.1 percent) and Alaska (+4.0 percent.)

On the other end of the scale, those states with the greatest depreciation including distressed sales were Idaho (-13.3 percent), Arizona (-12.3 percent), Michigan (11.9 percent), Florida (-0.6 percent) and Illinois (-10.6 percent).  When distressed sales are eliminated there is a pronounced shift; Nevada (-8.9 percent), Idaho (-8.8 percent), Arizona (-6.6 percent), Maine (-6.6 percent) and Minnesota (-5 percent).  One must assume there was an anomaly in Maine probably related to sample size that allowed it to rank among the highest states in both appreciation and depreciation.

The national HPI has depreciated 34.8 percent since the peak in April 2006.  When distressed sales are excluded from the data the drop is 22.5 percent.

Among the top 100 Core Based Statistical Areas (out of 592 covering 86 percent of the U.S. population) 92 declined between March 2010 and March 2011.  A year-over-year drop was recorded by only 85 of the areas in February.

The April edition of the Housing Scorecard has been issued by Treasury and the Department of Housing and Urban Development (HUD). It showed "continued mixed signals and some signs of weakness in the market - despite growing evidence of progress in the broader economy," according to Assistant HUD Secretary Raphael Bostic. 

The Obama Administration's monthly housing scorecard recaps data from a number of reports issued earlier by both public and private sources such as the U.S. Census, S&P Case/Shiller, RealtyTrac, and the Mortgage Bankers Association.  Most of the new information in the scorecard relates to the Making Home Affordable Modification Program (HAMP).

The HAMP program, which is under attack by Congress and threat of defunding, seems to have finally hit its stride.  36,000 trial modifications were converted to permanent status in March, the largest number since the program began in April 2009.  A total of 670,000 loans have been permanently modified during this period.  22,000 homeowners began trial modification periods since the last HAMP report bringing the total to 1.56 million.  Trial modifications have been cancelled for 751,500 loans since the program began and 137,363 homeowners remain in trial status.

"The numbers of homeowners both entering HAMP and converting from trial to permanent modifications each month are a powerful reminder of the role this program is playing in delivering much-needed assistance to families facing a housing market that is still very tough," said Acting Assistant Secretary for Financial Stability Tim Massad. "And by providing modifications that are sustainable for homeowners over time, HAMP is setting standards for the industry that ultimately mean more options for more families to avoid foreclosure."

The modifications are increasingly successful.  Permanent modifications began in earnest in Q3 2009 so those and the modifications made in the next two quarters have now aged past the one year mark with an average serious delinquency rate (90+ days) of 15.9 percent. There was a better than 4 percentage point improvement between loans made in the earliest of those three quarters and those made in the latest.  Loans that are in earlier stages of maturity appear to be performing substantially better yet.

The greater the reduction in monthly payments achieved through modification the more successful that modification is turning out to be.  Among the older vintage modifications, those that received less than a 20 percent payment reduction are running a 26 percent serious delinquency rate after one year while those with at 30-40 percent reduction have a rate of 16.1 percent and those with a reduction in excess of 50 percent have a rate of 8.8 percent.  This pattern is consistent at 3, 6, and 9 month benchmarks and across all vintages of modification.

Recapping previously released data...

Home prices remained weak under continued strain from foreclosures and distressed homes but delinquency rates maintained a downward trend compared to early 2010 and foreclosure starts and completions remain below peak. Part of the improving foreclosure picture is a result of on-going internal reviews of procedures related to foreclosure processing, a short-term situation. Plus banks are employing strategies aimed at reducing the home price impact brought on by sudden spikes in local foreclosure inventory.

With house prices still dropping in some areas, aggregate home equity was down fractionally in the first quarter and now hovers slightly above $6 trillion.  This is slightly above the record low point reached in the first quarter of 2009 but is less than half the homeowner equity that existed early in 2006.   

The low prices coupled with continued record low interest rates make houses extremely affordable.  The National Association of Realtors® (NAR) Housing Affordability Index is 187.8 where a score of 100 indicates that a family with a median income has exactly enough income to qualify for a mortgage on a median priced home.

Sales of existing homes were up about 50,000 from the previous month and the inventory of existing homes for sale dropped from 8.5 months supply to 8.4 months.  The inventory of new homes also dropped from 8.2 months to 7.3 months but the number of vacant homes held off of the market increased from 3.6 million to 3.86 million.

FULL REPORT