The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury released the February 2011 edition of the Obama Administration’s Housing Scorecard. The latest housing figures show increased existing home sales as home affordability remains high, but officials caution that the market remains fragile, as prices are unsettled.
“In the face of the deepest economic recession and housing crisis in decades, the Obama Administration has taken unprecedented action to promote stability in the market—keeping millions of families in their homes and helping millions more to save money by refinancing.
But the data clearly show that the market remains extremely fragile,” said HUD Assistant Secretary Raphael Bostic. “While we cannot stop every foreclosure, we know that many responsible homeowners are still fighting to make ends meet. Through the broad range of programs this Administration has put in place, we can put help in reach to those homeowners as early as possible.”
The housing market remains fragile as data through January 2011 paint a mixed picture of recovery. Existing home sales ticked upward in January, but remained below levels seen in the first half of 2010.
Mortgage delinquencies continued a downward trend compared to early 2010 and foreclosure starts and completions remain below peak. However, as lenders review internal procedures related to foreclosure processing, many foreclosure actions have been delayed. The decline is likely to be temporary as lenders eventually revise and resubmit foreclosure paperwork in the coming months.
Given the current fragility 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.
Economists at Moody’s Analytics say homes in many parts of the country are at their most affordable levels since before the housing boom took off in 2003, the Wall Street Journal reports.
According to the Journal, housing affordability – comparing home prices to household incomes – has returned to its average levels from 1989 to 2003 in 47 of the major markets included in the report. On a national level, the ratio of median home prices of household incomes has dropped to 1.6 from a high-water mark of 2.3 in 2005.
“Based on incomes, this is as affordable as it gets,” Mark Zandi, chief economist at Moody’s Analytics, told the WSJ. “If you can get a loan, these are pretty good times to buy.”
The paper added that many economists think prices may continue to fall a bit further because of weak demand.
However, qualifying for a mortgage to take advantage of those conditions may not be simple. A survey from Fannie Mae late last year found that more than half of Americans found that getting a mortgage would be difficult.
Some people interested in selling their home have had difficulty doing so, not because they haven’t been able to find a buyer, but because the bank’s appraiser says the home isn’t worth what the home was selling for.
A number of recent reports have highlighted the difficulty many buyers and sellers are having with appraisals in the current real estate market.
With foreclosures being a major factor in some areas, along with lower home prices, appraisers are sometimes coming up with values lower than the selling price. In those cases, either the buyer has to put more money down, or the seller has to drop their price. If neither side is willing to budge, then they either need to find another appraiser or forget the deal completely.
The issue is causing major issues in some markets. Earlier this month, real estate agents in Detroit told the Free Press that appraisals might be derailing up to 40 percent of their sales.
We’d love to know if you’ve run into a problem with an appraisal affecting a sale you’re involved with, either as a buyer, a seller, or even an agent? Use the comment link below to tell us your experience.