Housing Scorecard Reveals “Mixed Signals” with Home Prices and Delinquency Rates

The July edition of the Obama Administration’s Housing Scorecard, released by the U.S. Department of Housing and Urban Development (HUD) and the Department of the Treasury, shows “mixed signals” when it comes to the state of the housing market, with somewhat better home prices, but continued strain from foreclosures and distressed homes, says HUD.

Although home sales were below the last period’s levels, and mortgage delinquency rates saw a slight increase since the last period, the number of underwater mortgages went down by 1.7%, and housing prices experienced a small uptick. However, compared to last year, home sales have seen an small improvement, delinquency rates have gone down, and there was a 33.6% decrease in foreclosure starts.

“This month’s housing data paint a mixed picture of conditions in the market – despite growing evidence of progress in the broader economy,” said HUD Assistant Secretary Raphael Bostic. “We’re continuing to see a slight improvement in home prices and a decline in mortgage defaults as our foreclosure prevention programs reach more borrowers upstream in the process. But we have much more work to do to help the market recover and to reach the many households there and across the nation who still face trouble.”

Thanks to the Administration’s foreclosure prevention programs, tens of thousands of homeowners have gotten relief in what Treasury Assistant Secretary for Financial Stability Tim Massad called “the worst housing crisis in a generation.”

June saw a decline in the number of homeowners falling behind on their mortgages, with 4.4% of prime mortgages at least 30 days late, down from 2010’s peak level of 5.9%. In regards to seriously delinquent prime mortgages that are at least 90 days late or are in foreclosure, says HUD, numbers remain about 22% lower than the 1.9 million recorded last year.

Multiple programs have been set in place by the Administration, resulting in nearly five million modification arrangements started between April 2009 and May 2011. This figure includes more than 1.6 million Home Affordable Modification Program (HAMP) trial modification starts, more than 938,000 Federal Housing Administration (FHA) loss mitigations and early delinquency interventions, and nearly 2.4 million HOPE Now proprietary modifications, HUD data shows. To date, more than 760,000 homeowners have received HAMP permanent modifications, with a 37% median payment reduction.

The need for the HAMP program can be seen as the rate of trial modifications to permanent modifications has risen to 74%, with the average time of converting from trial to permanent down to three and a half months. The program’s success is evident as homeowners enrolled in the program are less likely to re-default, with 84% of homeowners remaining in permanent modification.

View the scorecard here.

Written by Alyssa Gerace

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