May 9, 2016

Measuring Progress in the Housing Market

Photo: Row of homes.

Our April housing scorecard provides a closer look at the recovery of our nation’s housing market and the success of the Administration’s programs. The latest data show progress among key indicators: a rebound in existing home sales, continued growth in home values, and very low mortgage rates.  Last month, the Federal Housing Finance Agency (FHFA) also announced a new initiative to help distressed homeowners improve their financial future. Fannie Mae and Freddie Mac will offer principal reduction to certain seriously delinquent, underwater borrowers who are still struggling in the aftermath of the financial crisis to help them avoid foreclosure and stay in their homes.

While important progress is being made, the Administration must continue to support initiatives that will continue helping more American families and homeowners recover from the Great Recession.

Here’s a closer look at April:

  • Sales of previously owned (existing) homes rebounded in March. The National Association of Realtors® (NAR) reported that sales of existing homes (including single-family homes, townhomes, condominiums, and cooperatives) climbed 5.1 percent in March to 5.33 million (SAAR) from a 5.07 million pace in February. Purchases were 1.5 percent higher than a year ago. Existing home sales have been above the 5.0 million mark for 12 of the last 13 months.
  • Home prices continued an upward trend in February with annual house price changes remaining fairly stable.  The Federal Housing Finance Agency (FHFA) seasonally adjusted purchase-only house price index for February showed home values rose 0.4 percent over the previous month and 5.6 percent over the previous year. The year-over-year house price gain has been 5.6 percent for the past three months. The FHFA index shows that U.S. home values are now 2.0 percent above their previous peak set in March 2007 and stand 28.8 percent above the low point reached in March 2011.
  • Mortgage rates were near a three-year low in April.  The average rate for a 30-year fixed rate mortgage was 3.58 percent for the week ending April 14, 2016, down from 3.97 percent at the start of the year and the lowest level since mid-May 2013. The average weekly 30-year fixed rate has started to rise again, however, reaching 3.66 percent the week ending April 28, 2016. (Source: Freddie Mac).
  • As mentioned above, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac will offer one-time principal reduction to certain seriously delinquent, underwater borrowers to help them avoid foreclosure and stay in their homes.The modification will be available to owner-occupant borrowers who are 90 days or more delinquent as of March 1, 2016, whose mortgages have an outstanding unpaid principal balance of $250,000 or less, and whose mark-to-market loan-to-value (MTMLTV) ratios exceed 115 percent. FHFA expects that approximately 33,000 borrowers will be eligible for a Principal Reduction Modification.  Servicers must solicit borrowers eligible for a Principal Reduction Modification no later than October 15, 2016.

The Administration’s programs continue to help struggling homeowners. In all, nearly 10.5 million mortgage modifications and other forms of mortgage assistance arrangements were completed between April 2009 and the end of March 2016.  More than 2.6 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 nearly 3.2 loss mitigation and early delinquency interventions through March. These Administration programs continue to encourage improved standards and processes in the industry, with lenders offering families and individuals nearly 4.7 million proprietary modifications through February (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 April 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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