Market Conditions

Shared Homeownership Addresses Affordability Issue


The U.S. housing recovery has become a victim of its own success.

Since bottoming out in first-quarter 2012, median home-sale prices nationwide have increased 54 percent. Although that may seem like good news at first blush, it’s not-so-good news when compared to the change in average weekly wages in the same time period — up just 10 percent.

The disconnect between home prices and incomes is even more extreme in some high-flying markets such as Contra Costa County, California, in what is known as the East Bay just outside of San Francisco. Contra Costa median home prices have skyrocketed 128 percent, to $535,000 in second-quarter 2016, since bottoming out in first-quarter 2012, but average wages have only increased 3 percent in the same time period.

A housing-market recovery far outperforming the broader economic recovery is pushing more markets over the […]

Luring Undecided Borrowers


More than 8.6 million borrowers in the U.S. with 30-year mortgages could qualify for and benefit from refinancing as of this past June, according to a recent market analysis. Like the proverbial carrot on a stick, these potential customers dangle just out of range waiting for the right enticement.

This number, however, represents an increase of 3.5 million potential refinance candidates from the end of 2015, driven largely by interest rates returning to near-historic lows, even after the Federal Reserve raised the federal funds rate for the first time in nine years. After waiting on the fence for so long, and worrying about the potential impact of coming rate increases, it turned out mortgage rates actually fell when global economic shocks earlier this year sent investors into the safe haven of U.S. Treasuries, driving down yields on benchmark 10-year bonds.

These historic low […]

Number of Underwater Homes Continued Decline in 4Q


The number of U.S. mortgages that were underwater continued to improve in the fourth quarter, although there are still millions of properties in the category, according to RealtyTrac.

Seriously underwater homes represented 11.5% of all properties with a mortgage, as of Dec. 31, according to RealtyTrac’s U.S. Home Equity & Underwater Report. That was down from 12.7% of all properties at the end of the third quarter.

The total number of seriously underwater homes at the end of the fourth quarter was about 6.4 million.

While progress is being made, it will take more time to clear out the inventory of underwater homes, Daren Blomquist, vice president at RealtyTrac, said in a news release.

“It will likely be another five years at least before most of those remaining underwater properties move into positive equity territory,” Blomquist said.

The number of seriously underwater homes that […]

Strategic Default: By the Numbers


The rate of home price recovery during the seven years that a foreclosure remains on a consumer’s credit report is one measure of whether borrowers who strategically defaulted made the right choice by walking away.

But the results vary, depending on when, where and in what price tier that borrowers defaulted.

After dropping more than 30% from the April 2006 peak, average national home prices are down by only about 7%, according to CoreLogic’s latest home price index data. Lower priced homes generally recovered less on average.

Zillow, which measures investment in a home compared to investment in the S&P 500 and renting in its Breakeven Horizon study, found that although most consumers who bought at the outset of the housing boom broke even twice, they currently have equity deficits.

“If you bought in 2005, you could be completely in the hole,” said Svenja Gudell, Zillow […]

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