Insights Into The Housing ‘Recovery’
As HPF interacts 24/7 with struggling homeowners still trying to survive the last housing crash, we are naturally concerned about the rash of news coverage declaring that the housing crisis is over. For the thousands who call the HOPE Hotline every day seeking assistance, the housing crisis is still very, very real.
So, we want to highlight the August 23rd commentary in DS News by Mark Lieberman who notes the eerie similarities between housing-related statistics in 2005, before the housing bubble burst, and those of today in 2013. He astutely observes that, while some of this year’s numbers are slightly better than those in 2005, there is still noteworthy data that is indicative of homeowners’ difficulty or inability to make their monthly mortgage payments.
Similarly, the Wall Street Journal ‘MoneyBeat’ August 26th blog by Steven Russolillo entitled “Housing’s Foundation on Shaky Ground” remarks upon the fragility of the housing market’s recovery in light of rising mortgage rates, while also noting that new home sales in July experienced their steepest drop in three years.
Meanwhile, RealtyTrac released its first-ever Housing Market Recovery Index, providing insight into the current state of housing’s recovery across various markets nationwide.
While some local markets are steaming full force ahead – fueled in part by rising home prices and declining foreclosure activity – many others continue to experience prolonged distress, largely caused by an above-average percentage of underwater borrowers and distressed sales.
For instance, foreclosure activity in Baltimore, Maryland – the city that ranked lowest for recovery on the index’s list – was down 26 percent from its peak, but remains well below the 65 percent national decease. And while new foreclosure activity is past its peak in all 100 of the largest metros, distressed sales still account for at least one in every five sales in nearly 75 percent of the metropolitan areas. Additionally, 63 markets still have at least 20 percent of homes underwater.
While the housing market continues to show signs of improvement, the recovery is fragile and remains notably uneven and localized. The housing crisis is far from over.