Tag Archives: Housing Supply

With fewer properties entering the foreclosure process and more delinquent borrowers avoiding foreclosure, the number of foreclosed single-family homes held by lenders and government agencies has rapidly declined. In the April issue of DS News magazine, contributing writer Keith Button explored the many market drivers taking their toll on the once-strong stock of bank-owned homes.

Existing-home sales dipped on both a monthly and annual basis in November, marking the first year-over-year decline in sales in nearly two and a half years. Hurt by higher mortgage interest rates, constrained inventory, and tight credit, sales of previously owned homes came in at an annualized rate of 4.90 million last month, the National Association of Realtors reported.

One of the earliest phenomenon of the housing bubble was the ascension of home prices, making housing unaffordable relative to incomes. Markets across the nation cascaded from affordable to unaffordable--a key signal that prompted us to warn of the coming housing downturn. And it now appears that this symptom has cropped up once again, as almost all of California's coastal cities are now unaffordable.

Southwestern Pennsylvania saw a nearly 15 percent annual increase in the number of homes placed under sales agreement, according to the November housing report from the West Penn Multi-List, Inc. At the same time, the average number of days homes were on the market decreased by nearly 15 percent.

Inventories of homes for sale have been slow to bounce back since the 2007-09 recession, despite steady price appreciation since January 2012. Normally, higher prices reflect robust sales. But lately, prices have been rising even though sales remain stuck at relatively low levels, largely due to a lack of inventory. So why are there so few homes for sale? Two Fed economists examine the many factors affecting today's inventory levels.

Distressed inventory is on the decline, but the number of months it will take to clear these distressed homes from the market is on the rise. According to the latest report from Morningstar Credit Ratings, distressed inventory among non-agency residential mortgage-backed securities dropped 20 percent to 891,000 properties as of September. However, Morningstar says it will take 49 months to work through this inventory given current market dynamics. That's 11 months longer than the assessment in 2012.

While many Americans paused their homebuying plans during the federal government's partial shutdown last month, purchase activity rebounded once the government reopened, with buyer competition more robust than expected, according to a Redfin. Out of the 22 markets covered in the brokerage's report, San Diego experienced the biggest increase in multiple-bid offers on homes for sale, while Boston saw the biggest drop.

The nation's foreclosure inventory has contracted for 18 consecutive months and is now at its lowest point since the end of 2008, totaling 1.28 million loans, or just 2.54 percent of today's active mortgages, according to Lender Processing Services. The company's latest report assessing the performance of mortgage assets through the end of October shows the industry's foreclosure inventory rate has plummeted 29.61 percent from last year.

Existing-home sales translate to an annual rate of 5.12 million at the October sales pace, according to the National Association of Realtors (NAR). October's sales volume was down 3.2 percent from September and marked the second consecutive month of declining transactions. NAR blames low inventory, diminished buying power from rising prices and interest rates, and a restrictive credit environment for the drop in sales.

While headlines continue to portray a housing market with rising prices and tight inventory, vacancies remain high. Government data released this week reveal a dark cloud looming behind the bright headlines. According to Trulia, more than three-fourths of the nation's largest markets are dealing with more empty homes than prior to the latest housing bubble.