The Bad News – Foreclosure Rate Climbs
According to a recent CNBC article, US foreclosure activity rose again in August as banks took ownership at a 3% higher clip from the previous month. Property owners receiving default notices, one of the first steps in the foreclosure process, actually fell 1% from a month ago and 30% from the same month last year. Foreclosure filings grew 4.18% in August from the previous month but were down 5.48% from the same time last year.
Nevada currently has the highest foreclosure rate in the nation with one in every 84 properties receiving notice. Florida was second (1 in 155) followed by Arizona ( 1 in 165). Vermont had the slowest foreclosure rate with only one in every 18,389 homes.
According to the map on Realty Trac’s web site, Maricopa County (home to Phoenix and Tempe) is the worst market in Arizona with close to 76,000 foreclosures. Clark and Nye Counties in Nevada had the highest rates in that state while Broward and Miami-Dade Counties had the most properties listed in the Sunshine State.
The Good News – New Home Sales are Showing Signs of Life
A joint press release on August 23rd from HUD and the Department of Commerce reinforced signs that the US housing market is in the recovery mode. Based on figures from July, new home sales were reported to be up by 3.6 percent from June. Regionally, the Northeast saw the most activity, with a whopping 76.5 percent increase in new-home sales from June. The Midwest came in second best with a 7.7 percent gain.
The Commerce Department noted that the increase in sales was seasonally adjusted to a 372,000-unit annual rate. This figure matches a two-year high recorded in April. In comparison to the figures for July 2011, home sales were up by 25.3 percent. In terms of prices, the median for new homes sold in July was $224,200.00 and the average was $263,200.00. The seasonally adjusted price was $142,000.00.
Real estate professionals and home builders were especially pleased with the news and increase in activity. While it appears that consumers are regaining confidence, many are watching the home sales statistics cautiously. Even with continued low mortgage rates, there are still concerns about the dwindling inventories of new homes and the tighter restrictions on lending. Many market watchers predict that for sales to improve significantly, home financing guidelines should be a little easier on qualified buyers.
In a statement from the National Association of Home Builders, their Chief Economist, David Crowe, explained, “The fact that the inventory of new homes for sale reached an all-time low in July is a worrisome signal that ongoing, unnecessarily tight credit conditions are keeping builders from being able to replenish supplies as consumer demand improves.”
This week Freddie Mac announced fixed mortgage rate averages hit new all-time lows after the Federal Reserve announced a new bond purchase plan. The 30 year fixed rate average slipped to 3.49% (.6 pt) and the 15 year rate average sunk to 2.77% (.6 pt). If you’ve been sitting on the fence waiting for the perfect time time buy, it might be time to hop off.