January 11, 2016

Measuring Progress in the Housing Market

Photo: Row of homes.

Our latest housing scorecard examines housing recovery data, our programs’ performance, and areas for improvement.

As 2015 came to a close, we saw our housing market reach key milestones on the path to recovery – homeowners’ equity rose again, the number of homeowners in negative equity continues to decline, and purchases of new homes increased. It’s clear that we must continue to support programs that will allow more American families and homeowners to recover from the Great Recession.

Here’s a closer look back at some of our progress:

  • Homeowners’ Equity rose again in the third quarter of 2015. Homeowners’ equity (total property value less mortgage debt outstanding) was up $361 billion (3.0%) from the second quarter of 2015, for a total of nearly $12.4 trillion–the highest level since the fourth quarter of 2006. Homeowners’ equity peaked in the first quarter of 2006 at nearly $13.3 trillion.  The increase in owners’ equity was $260 billion in the second 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 $6.1 trillion (+98.6%). (Source: Federal Reserve).
  • The number of homeowners in negative equity continued to decline in the third quarter. As of the third quarter of 2015, CoreLogic estimated that 4.1 million homes, or 8.1 percent of residential properties with a mortgage, were in negative equity. This compares to 4.3 million, or 8.7 percent, that were reported in negative equity in the second quarter and 5.2 million, or 10.4 percent one year ago. From the beginning of 2012 through the third quarter of 2015, the number of underwater borrowers (those who owe more on their mortgage than the value of their home) has declined by 66 percent–from 12.1 million to 4.1 million—or by 8.0 million homeowners. (Source: CoreLogic).
  • Purchases of new homes rose 4.3 percent in November but remained below the 500,000 mark. New home sales increased to 490,000 (SAAR) in November from a downwardly revised October pace of 470,000 and were 9.1 percent higher than a year earlier. New home sales have been at or above the 500,000 mark for 6 of 11 months this year. Data on new home sales can be volatile and are often revised. (Source:  HUD and Census Bureau).

The Administration’s programs continue to help struggling homeowners. In all, more than 10.1 million mortgage modifications and other forms of mortgage assistance arrangements were completed between April 2009 and the end of November 2015. More than 2.5 million homeowner assistance actions have taken place through the Making Home Affordable Program, including nearly 1.6 million permanent modifications through the Home Affordable Modification Program (HAMP), while the Federal Housing Administration (FHA) has offered more than 3.0 million loss mitigation and early delinquency interventions through November. These Administration programs continue to encourage improved standards and processes in the industry, with lenders offering families and individuals more than 4.6 million proprietary modifications through -October (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 December 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 & Research.

Leave a Reply

Your email address will not be published. Required fields are marked *