Talking about the good news about housing starts and the increase in HARP refinances. And much more…
FHFA Reports 25% of Refinances in August Were HARP Refis
FHFA, the Federal Housing Finance Agency recently released their August 2012 Refinance Report. FHFA is saying that that 25% of Fannie Mae and Freddie Mac mortgages that were refinanced in August 2012 were refinanced through the Home Affordable Refinance Program. With the extremely low mortgage rates available today, it is not surprising that many home owners are refinancing. Since 2009, Fannie & Freddie have made 1.6 million loans through HARP.
In August 2012, more than half of borrowers had a loan-to-value that was greater than 105. In other words, more than half were underwater. So despite the many recent stories about the improving real estate market, we still have not regained all the ground that was lost. Home prices are recovering but it is going to be some time before home prices reach the levels they were at before the housing crash in some areas of the US. The majority of the underwater mortgages were in states that were hard hit after the housing bubble burst.
Housing Starts Up
After that gloomy news, how about some good news for real estate and the economy? Well HUD and the Census Bureau released the numbers for housing starts for September 2012 and I am glad to report they are up 34.8% above the September 2011 level. If we look at the long range history we do see that we have a long way to go before we are back to the levels of just a few years ago:
Still, we are at least moving in the right direction. Remember that housing makes a HUGE contribution to our economy. And new household formation will mean more demand in the future. So things are getting better and should continue to get better. This is the biggest increase in 4 years and the 45.1% increase in permits is the biggest increase EVER! Like I said, good news!
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