Discussing the NAR Existing Home Sales report and looking at what happened in Anderson County, possible foreclosure help for FHA mortgage holders and more!
US Existing-Home Sales Down 1.2% YoY
March 2018 US Existing Home Sales
Total existing-home sales rose 1.1 percent to a seasonally adjusted annual rate of 5.60 million in March from 5.54 million in February. Despite last month’s increase, sales are still 1.2 percent below a year ago.
The median existing-home price for all housing types in March was $250,400, up 5.8 percent from March 2017 ($236,600). March’s price increase marks the 73rd straight month of year-over-year gains.
Total housing inventory at the end of March climbed 5.7 percent but is still 7.2 percent lower than a year ago and has fallen year-over-year for 34 consecutive months. Unsold inventory is at a 3.6-month supply at the current sales pace (3.8 months a year ago).
Properties typically stayed on the market for 30 days in March, which is down from 37 days in February and 34 days a year ago. Fifty percent of homes sold in March were on the market for less than a month.
Lawrence Yun, NAR chief economist, said:
Robust gains last month in the Northeast and Midwest – a reversal from the weather-impacted declines seen in February – helped overall sales activity rise to its strongest pace since last November at 5.72 million. The unwelcoming news is that while the healthy economy is generating sustained interest in buying a home this spring, sales are lagging year ago levels because supply is woefully low and home prices keep climbing above what some would-be buyers can afford.
Although the strong job market and recent tax cuts are boosting the incomes of many households, speedy price growth is squeezing overall affordability in several markets – especially those out West.
Realtors® throughout the country are seeing the seasonal ramp-up in buyer demand this spring but without the commensurate increase in new listings coming onto the market. As a result, competition is swift and homes are going under contract in roughly a month, which is four days faster than last year and a remarkable 17 days faster than March 2016.
This is the 2nd consecutive month of increasing sales despite inventory decreasing for 34 consecutive months. The shortage of affordable homes is especially evident because NAR said sales of homes under $100,000 dropped 21% from a year ago.
The lack of inventory combined with strong demand is causing most areas to be a seller’s market. This is especially true for starter or affordable homes as homes priced under $1
Remember that NAR is talking about existing home sales for the entire country. This may not reflect what is happening in every local market.
Looking at WUAR data for Anderson County SC, we see that home sales in March 2018 decreased 4.4% compared to March 2017. The median sold home price was 1.04% higher in March 2018 compared to March 2017.
The average Days on Market in March 2018 was 29 days higher than March 2017. 40.5% of homes sold during March 2018 were under $150,000 compared to 43.6% during March 2017.
Remember these statistics for Anderson County are for an entire month and for all home types. It will not tell you exactly what is possible or realistic for a specific home.
FHA Foreclosure Prevention Bill Introduced Into Congress
Recently, Congresswoman Maxine Waters (D-CA) introduced a bill that would help to prevent foreclosures for FHA borrowers by increasing oversight and the requirements of mortgage servicers. Hopefully, this bill will give people with a FHA mortgage the possibility to get back on track after after defaulting on their mortgage.
The FHA Foreclosure Prevention Act of 2018 (H.R. 5555) would require HUD to improve their oversight of FHA lenders in order to improve compliance with all of the FHA’s loss mitigation requirements. This proposed legislation also establishes an effective complaint and appeals process to give consumers a chance to report about unfair treatment.
Congresswoman Waters said:
A decade after the devastating foreclosure crisis, we continue to see significant problems with the servicing of FHA loans that unnecessarily put homeowners at risk of foreclosure. My bill, the FHA Foreclosure Prevention Act, would ensure that FHA servicers help families experiencing financial hardship avoid foreclosure so that they can remain in their homes.
Senator Catherine Cortez Masto (D-NV) also introduced a companion bill (S. 2698) in the Senate and Senator Elizabeth Warren (D-MA) is an original cosponsor of this bill.
Senator Cortez Masto said:
As Nevada’s attorney general during the foreclosure crisis, I saw far too many lives turned upside down due to rampant foreclosures, as well as the devastating effects that come with losing one’s home. To this day, borrowers are unnecessarily being put at risk of losing their homes because of servicers’ failures to comply with the FHA’s loss mitigation requirements. This bill will implement common-sense measures to give borrowers a fair chance at avoiding foreclosure.
The National Housing Law Project (NHLP) and the National Consumer Law Center (NCLC) support this bill.
National Housing Law Project Executive Director Shamus Roller said:
NHLP supports strengthening HUD’s oversight of FHA loan servicers. For too long, homeowners experiencing financial hardship have suffered from the failure of servicers to comply with basic loss mitigation requirements.
National Consumer Law Center Attorney Alys Cohen said:
This much-needed bill will promote sustainable homeownership for low and moderate-income borrowers. By increasing servicer accountability and homeowner communication, this bill will save HUD money by preventing avoidable foreclosures.
This bill sounds great but the lack of any Republicans being involved probably mean this bill is destined to fail. The dismal behavior of some mortgage servicers is well documented but the mortgage servicers will be fighting this bill.
Moderation of Economic Growth in March
From Chicago Fed National Activity Index:
Led by slower growth in production- and employment-related indicators, the Chicago Fed National Activity Index (CFNAI) declined to +0.10 in March from +0.98 in February. Three of the four broad categories of indicators that make up the index decreased from February, but two of the four categories made positive contributions to the index in March. The index’s three-month moving average, CFNAI-MA3, decreased to +0.27 in March from +0.31 in February.
The index is a weighted average of 85 indicators of growth in national economic activity drawn from four broad categories of data: 1) production and income; 2) employment, unemployment, and hours; 3) personal consumption and housing; and 4) sales, orders, and inventories.
Check out the chart showing the Chicago Fed National Activity Index going back to 1967:
While we are not at the lows of previous recessions, we also have not hit the highs after the highs that we did after other recessions.
Well that is all I have time for today! If you enjoyed this article, please hit the share buttons or subscribe so you are notified of new posts via email!