Morning Briefing: Foreclosure starts lowest since 2003

by Steve Randall19 Feb 2016
Foreclosure starts lowest since 2003
The rates of foreclosures and delinquencies on mortgages have fallen again with outstanding payments on 1-to-4 unit residences down 22 basis points in the fourth quarter of 2015. The seasonally-adjusted rate of 4.77 per cent of all loans outstanding is the lowest since 2006 while the percentage of loans where foreclosure action was started fell to 0.36 per cent, the lowest level since 2003.

The figures, from the Mortgage Bankers’ Association also reveal that the percentage of mortgages that were seriously delinquent (90 days or more) was 3.44 per cent, the lowest rate since 2007.

"The overall delinquency rate fell to pre-recession levels and at 4.8 percent, was lower than the historical average of 5.4 percent for the time period 1979 to 2015. The rate at which new foreclosures were started decreased to 0.36 percent, the lowest rate since 2003 and only one-fourth of the record high level during the worst of the foreclosure crisis in the third quarter of 2009,” Marina Walsh, MBA’s VP of Industry Analysis said.
Homes in this market sold fastest for a decade
The housing market in Iowa showed strong gains in 2015 according to new data from the Iowa Association of Realtors. Homes were selling in an average of 80 days, the fastest rate for more than 10 years. Median prices increased 7.7 per cent to $140,000 and sales were up 1.9 per cent to 44,621 units. Inventory was 4.7 months at the end of 2015, favoring sellers.
Fannie Mae expects underwater loans to rise above the line
Many homeowners who are currently underwater should move into positive equity in 2016. The Fannie Mae Economic and Housing Outlook for February highlights rising prices “should help lift underwater mortgages and create a healthier housing market.”  It also says that low mortgage rates and easing credit standards will contribute to that healthier market.

Although the corporation notes the challenging global economic factors and slowing growth in some areas of the US economy, it expects that building of single-family homes should increase this year while multi-family building will moderate from the 2015 level.
Mortgage rates unchanged this week
Fixed rate mortgage rates were unchanged in the week ending Feb. 18 with 30-year loans averaging 3.65 per cent and 15-year loans averaging 2.95 per cent. The Freddie Mac Primary Mortgage Market Survey shows that 5-year ARM’s ticked higher at 2.85 per cent compared to 2.83 per cent in the week prior. All three remain lower than a year ago.


Should CFPB have more supervision over credit agencies?