Despite strong improvements in home prices, purchases of new homes and sales of existing homes, officials caution that the overall recovery remains fragile, the Obama administration said in its latest October housing scorecard.
“As indicated in the October housing scorecard, the Administration continues to work to stabilize the housing market and help responsible homeowners get back on their feet,” said the Department of Housing Urban Development Deputy Assistant Secretary for Economic Affairs Kurt Usowski.
“With homeowners’ equity at its highest level since 2007 and home prices increasing steadily, it is clear that we are moving in the right direction. As our housing market regains stability, it seems the time is ripe for private capital to begin taking a larger role in the housing finance system,” Usowski added.
Home prices maintained their steady growth, with S&P Case-Shiller home price index rising to 164.5 in October from 162.4 last September. Year-over-year the index is up from 145.8 the same period a year ago.
Existing homes sales took a dive down, as sales dropped to 440,800 in October to from 449,200 in September, according to the latest data from the National Association of Realtors. However, this is significantly up from 398,300 in October 2012.
Homebuilders are heading into their peak season, with more than 75% of annual homebuilder returns historically generated in the November-to-January timeframe. Following past trends, new home sales rose to 35,100 in October, up from 32,500 in September and 31,200 October 2012, data from the U.S. Census Bureau and HUD reported.
The supply of existing-homes for sale remained fairly unchanged, as inventory inched up from a 4.9-month supply in September to a 5-month supply in October, NAR posted. Meanwhile, the supply of new homes for sale slightly dipped to a 5-month supply in October, compared to a 5.2-month supply in September, the Census Bureau and HUD said.
In addition, the industry took a slight step back in progress, with foreclosure starts increasing to 58,000 in October, from 55,800 last month, the most recent RealtyTrac found.
Furthermore, mortgage delinquency rates for prime borrowers remained frozen at 3.3% in October, according to Lender Processing Services.
“The degree to which the mortgage delinquency and foreclosure problem has changed over the last five years is perhaps best illustrated by the fact that last quarter New Jersey led the nation in the increase in the percentage of foreclosure actions filed, followed by Delaware, Maryland and Indiana,” said Jay Brinkmann, the Mortgage Banker Association's chief economist and senior vice president of research and education.