October 13, 2015

Measuring Progress in the Housing Market

Photo: Row of homes.

HUD’s September housing scorecard provides a closer look at the recovery of our nation’s housing market. Although this scorecard notes that the housing market is on a healthy trajectory, it’s clear we must stay committed to helping American families and homeowners who continue to recover from the Great Recession. The latest data shows progress among key indicators, including growing strength in new home sales, an uptick in homeowners equity, and a steep decline in the number of underwater borrowers.

Here’s a closer look:

  • Purchases of new homes climbed to 552,000 (SAAR) in August, the highest pace since February 2008. Purchases of new homes rose 5.7 percent from an upward revised July pace of 522,000 and were 21.6 percent higher than a year earlier. New home sales have been above the 500,000 mark for 6 of 8 months this year. Data on new home sales can be volatile and are often revised. (Source:  HUD and Census Bureau).
  • Homeowners’ Equity rose in the second quarter of 2015. Homeowners’ equity (total property value less mortgage debt outstanding) was up nearly $397 billion (3.4%) from the first quarter of 2015, for a total of over $12.1 trillion–the highest level since the first quarter of 2007. The increase in owners’ equity was $420 billion in the first quarter. The change in equity since April 1, 2009, when the Administration initiated its broad set of actions to stabilize the housing market, now stands at more than $5.9 trillion (+95.6%). (Source: Federal Reserve).
  • The number of underwater homeowners had a sharp decline in the second quarter. As of the second quarter of 2015, CoreLogic estimated that 4.4 million homes, or 8.7 percent of residential properties with a mortgage, were in negative equity. This compares to 5.1 million, or 10.2 percent, that were reported in negative equity in the first quarter and 5.4 million, or 10.9 percent one year ago. From the beginning of 2012 through the second quarter of 2015, the number of underwater borrowers (those who owe more on their mortgage than the value of their home) has declined by 64 percent–from 12.1 million to 4.4 million—or by 7.7 million homeowners. (Source: CoreLogic).

The Administration’s programs continue to help struggling homeowners. Nearly 9.9 million mortgage modifications and other forms of mortgage assistance arrangements were completed between April 2009 and the end of August 2015, including nearly 2.5 million homeowner assistance actions through the Making Home Affordable Program, 2.9 million through the Federal Housing Administration’s loss mitigation programs, and more than 4.5 million proprietary modifications through July (data are reported with a two-month lag).

Although there is good news overall, the Administration remains committed to helping more Americans realize their dream of home ownership through an improving economy and new programs that will provide greater access to credit.

This is just a brief overview of the August Housing Scorecard. For more information about the health of the housing market and how Administration programs are helping families please visit: www.hud.gov/scorecard.

Katherine O’Regan is the Assistant Secretary for the Office of Policy Development and Research.

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