Scorecard: Housing recovery continues to make progress
But positive indicators don’t mean the recovery is complete
The housing recovery is continuing to trend in a positive direction, but more work needs to be done to help the economy fully recover, the Obama administration said in its June housing scorecard, which is a comprehensive report on the nation’s housing market prepared by U.S. Department of Housing and Urban Development and the U.S. Department of the Treasury.
June’s housing scorecard echoes the sentiments of the last two housing scorecards. In May, the administration cited overall positive trends in the housing market, but cautioned that the harsh winter slowed growth while the economy continues to recover from the Great Recession.
In April, the administration also noted the tough winter as a challenge to the year’s housing performance.
June’s scorecard identifies growing equity and a rebound in the sale of new and existing homes as positive trends.
“The June Housing Scorecard shows the housing market continues to make progress as we move into the summer months,” said HUD Assistant Secretary for Policy Development and Research Katherine O’Regan. “Sales of new and existing homes are up, equity continues to grow, and foreclosures starts continue trending down. While these are all signs of a healthy recovery, given the severity of the housing crisis, we must stay committed to helping homeowners.”
According to June’s scorecard, purchases of new homes surged 18.6% in May, indicating an improving market. New home sales rebounded to a seasonally adjusted annual rate of 504,000 in May, following sales of 425,000 in April. That’s up 16.9% from one year ago.
In May, purchases of new homes rose by the biggest monthly gain in 22 years (since January 1992) and to the highest level since May 2008.
The administration said that this “indicates that home sales are rebounding from a severe-weather induced lull during the previous two quarters.”
The scorecard also cited the rise in existing homes as a positive. Existing homes, which include single-family homes, townhomes, condos, and co-ops, sold at a seasonally adjusted annual rate of 4.89 million in May, which is up 4.9% from April.
But that figure is still 5% below the 5.15 million pace of May 2013.
The scorecard also noted the decreasing rate of foreclosure starts and completions as an encouraging sign. Lenders started the public foreclosure process on 49,240 U.S. properties in May, down 10% from the previous month and down 32% from one year ago to the lowest level since December 2005.
The scorecard also recognized the success of the administration’s foreclosure mitigation programs. “In all, more than 8.5 million mortgage modification and other forms of mortgage assistance arrangements were completed between April 2009 and the end of May 2014,” the administration said.
“Although the housing market continues to improve, Treasury remains committed to helping homeowners who are still struggling to make their mortgage payments,” said Treasury Acting Assistant Secretary Tim Bowler. “To date, more than 1.3 million homeowners have received a permanent modification through the Home Affordable Modification Program, saving an estimated $28.2 billion in mortgage payments.”
And last month, Treasury Secretary Jacob Lew announced the extension of the HAMP program until at least the end of 2016. “We need to continue to be there for homeowners who are facing foreclosure, those who are struggling with increasing interest rates on their modified mortgages, and those whose homes are caught underwater,” Lew said at the time.
“The truth is, when you work hard, act responsibly, and play by the rules, you should not have to live in fear that you are going to lose your home.”
To that end, the administration said that despite the encouraging news in the June scorecard, “there is a need to continue with recovery efforts to sustain home sales, help homeowners that are underwater, and reduce mortgage delinquency rates that remain elevated.”
The administration said that it will continue to try to spur the recovery where it can. “Given the current state of the market and recognizing that recovery will take place over time, the administration remains committed to its efforts to prevent avoidable foreclosures and stabilize the housing market,” the administration said.