Morning Briefing: Drop in underwater properties says RealtyTrac

by Steve Randall28 Jan 2016
Drop in underwater properties says RealtyTrac
The proportion of seriously underwater properties was 11.5 per cent at the end of 2015 according to new data from RealtyTrac, a drop from the previous year. There were 6.4 million homes in the US with market values at least 25 per cent lower than their outstanding mortgage, 481,292 fewer than at the end of the third quarter of 2015 and 616,189 fewer than at the end of 2014. Las Vegas, Lakeland FL and Cleveland had the highest levels of seriously underwater properties; San Jose CA, San Francisco and Austin TX had the lowest.

“Over the past three and a half years, the number of seriously underwater properties has been cut in half, but we continue to deal with a long tail of seriously underwater properties, and it will likely be another five years at least before most of those remaining underwater properties move into positive equity territory,” said Daren Blomquist, vice president at RealtyTrac. “At the other end of the spectrum, the growing number of equity rich properties reflects a moribund move-up market and restrained leveraging of home equity by U.S. homeowners.”

The number of homes with at least 50 per cent equity was 12.6 million or 12.5 per cent of all those with a mortgage at the end of 2015. That’s up 2.1 million from the end of 2015’s third quarter and up 1.4 million from the end of 2014.
Strong improvement for housing says Freddie
Freddie Mac’s Multi-Indicator Market Index showed a slight improvement from October to November 2015 with a rise of 0.82 per cent; was 2.09 per cent higher for the quarter and 7.23 per cent up year-over-year. Thirty-three of the 50 states plus DC were deemed stable with DC, North Dakota, Hawaii, Montana and Utah making up the top 5. The most improved states year-over-year were Florida, Oregon and Colorado.

“The regional variation of housing activity continues to become more pronounced. For example, we're still seeing declines in oil-dependent housing markets, whereas the hardest hit metros from the Great Recession continue to see some of the best improvement as they recover. In the short-term, we expect homebuyer affordability to remain strong with mortgage rates continuing to look very attractive to prospective homebuyers," said deputy chief economist Len Kiefer.
Mortgage applications higher last week
There was an increase in mortgage applications for the week ending Jan. 22 according to the Mortgage Bankers’ Association’s weekly survey. The Market Composite Index was up 8.8 per cent from the week prior on a seasonally-adjusted basis.

On an unadjusted basis, the Index increased 0.3 per cent; the Refinance Index increased 11 per cent; the seasonally adjusted Purchase Index increased 5 per cent; the unadjusted Purchase Index increased 0.4 per cent compared with the previous week and was 22 per cent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 59.0 per cent of total applications from 59.1 per cent the previous week; ARM share increased to 6.9 per cent; FHA share decreased to 12.7 per cent from 13.7 per cent; VA share increased to 11.1 per cent from 10.8 per cent; USDA share remained unchanged from 0.7 per cent.


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