Flat February House Prices Spur Foreclosure Inventory Fears: RadarLogic

House prices remained flat in February on both a month-over-month and year-over-year basis, according to the Radar Logic Residential Property Index (RPX). The 2% increase in the Western region RPX composite balanced the 2% decline in the Northeast and South RPX, keeping prices stable overall from last month. Transactions grew the most since last year in metropolitan areas that are hardest-hit with foreclosures, Radar Logic said, including Las Vegas, Chicago, Miami and Detroit. Sales at foreclosure auctions and real estate owned (REO) sales rose slightly as a percent of total transactions, while the composite price for distressed sales came in 38% lower than other sales. During the 4 weeks ending January 18, 29% of home sales were distressed sales. In the four weeks ending February 18, 30% of home sales were distressed sales. The increase in distressed sales as a percentage of total sales was the result of a 20% increase in distressed sales combined with a 12% decrease in all other sales. Radar Logic noted potential buyers could delay their plans to purchase a house out of concern that the ongoing flood of foreclosures will trigger a double dip in prices. The company warned that fears of a double dip could be self-fulfilling if demand declines to the point where it can no longer keep pace with foreclosure-driven supply. Radar Logic said its data does not indicate that a second nationwide decline in home prices is under way. The company called February results “more up-beat” than any other February results since the peak of the housing boom. “We believe that low home prices and low mortgage rates will continue to spur sufficient housing demand to absorb foreclosure-driven increases in supply at current price levels,” said Quinn Eddins, Radar Logic’s director of research. “Nevertheless, we will watch foreclosure rates and sales activity closely in the coming months for signs of flagging homebuyer confidence.” Write to Diana Golobay.

Most Popular Articles

PennyMac warns mortgage originators that forbearance buybacks could be coming

With the housing industry at large raising alarms about mortgage servicers’ desperate need for liquidity, the nation’s largest mortgage aggregator is now warning originators that it could force them to buy back loans that go into forbearance.

Apr 06, 2020 By

Latest Articles

COVID-19 pandemic warranted forceful response, Fed says

The economic deterioration caused by the COVID-19 pandemic warranted a “forceful” response, according to the minutes of the Fed’s March 15 emergency meeting.

Apr 08, 2020 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please