Part 4: Is the Housing Market Better Than 4 Years Ago?

Delinquencies have slowed, even though foreclosures remain high.

As the job market picks up, fewer people are falling behind on their mortgages.  7.40% of mortgages were delinquent in September 2012, which is down from 8.61% in January 2009. Although delinquencies have fallen, foreclosures have increased. This may be due to the foreclosure stage is the later part of a long process and therefore lags the improvement in home prices and the delinquency rate. The share of mortgages in the foreclosure process has risen to 3.87% in September 2012 from 2.43% in January 2009. Most of this increase is due to foreclosures backing up in “judicial” states such as Florida and New York, which have a much longer legal foreclosure process. The share of homes in foreclosure is now almost three times higher in “judicial” states than in “non-judicial” states.
 Even if the housing market is in better shape than it was four years ago, Obama can’t take much credit for it. Although mortgage rates are lower, credit for that goes to the weak economy and the Federal Reserve. The declines in inventories and vacancies are mostly because new construction plunged after 2007 and has remained far below normal levels – so few new homes have been built. It is also because there are fewer foreclosed and other distressed homes for sale. And the biggest hangover from the housing crisis – homes stuck in the foreclosure process – is governed more by states than by the feds.
Obama’s main contributions to the housing recovery were the 2009 stimulus, which prevented a worse recession which ultimately boosted housing demand, and the ongoing push to make refinancing more widely available, which has given the economy further modest stimulus. But there’s little that the Administration did – or could have done – to influence home prices and construction.
Even though the housing market may be in better shape than it was four years ago, it’s still far from normal. Trulia’s Housing Barometer shows that “normal” is still years away – and huge housing policy questions, like the future of mortgage giants Fannie Mae and Freddie Mae, are unanswered. Other big challenges remain: mortgage credit is still tight, and four million foreclosures since the start of the housing crisis have left families with wrecked credit, lost homes and personal suffering. Thus, the housing market is nothing to cheer loudly about. But overall, is it better off than four years ago? Surprisingly, yes.

 Serving Anderson SC Real Estate, Clemson Real Estate, and Lake Hartwell Real Estate,

Nancy Lamar, REALTOR
Fine Home Specialist
www.CallNancyLamar.com