Mortgage foreclosure rate lowest since 2003
The mortgage foreclosure rate has dropped to a more normal rate. This was the major point in a report recently issued by the Mortgage Bankers Association.
"The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 4.77 percent of all loans outstanding at the end of the fourth quarter of 2015. This was the lowest level since the third quarter of 2006.
"The delinquency rate decreased 22 basis points from the previous quarter, and 91 basis points from one year ago," according to the Mortgage Bankers Association's National Delinquency Survey, released at the association's National Mortgage Servicing Conference and Expo 2016 in Orlando, Florida.
"The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure."
The report also revealed fewer loans are falling into foreclosure.
"The percentage of loans on which foreclosure actions were started during the fourth quarter was 0.36 percent, a decrease of two basis points from the previous quarter, and down 10 basis points from one year ago. This foreclosure start rate was at the lowest level since the second quarter of 2003.
"The percentage of loans in the foreclosure process at the end of the third quarter was 1.77 percent, down 11 basis points from the third quarter and 50 basis points lower than one year ago. This was the lowest foreclosure inventory rate seen since the third quarter of 2007."
The report included a comment by Marina Walsh, MBA's Vice President of Industry Analysis:
"The overall delinquency rate fell to pre-recession levels and at 4.8 percent, was lower than the historical average of 5.4 percent for the time period 1979 to 2015. The rate at which new foreclosures were started decreased to 0.36 percent, the lowest rate since 2003 and only one-fourth of the record high level during the worst of the foreclosure crisis in the third quarter of 2009."
Q. Are mortgage rates still declining?
A. Yes, at this writing, rates for fixed-rate mortgages are dropping. Freddie Mac released the results of its Primary Mortgage Market Survey, showing fixed mortgage rates resuming their decline and aiding homebuyer affordability amid a tight supply of for-sale homes in many markets.
"The 30-year fixed-rate mortgage averaged 3.62 percent with an average 0.6 point for the week ending Feb. 25, down from last week when it averaged 3.65 percent. A year ago at this time, the 30-year FRM averaged 3.80 percent.
"The 15-year FRM this week averaged 2.93 percent with an average 0.5 point, down from last week when it averaged 2.95 percent. A year ago at this time, the 15-year FRM averaged 3.07 percent. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.79 percent this week with an average 0.5 point, down from last week when it averaged 2.85 percent.
"A year ago, the 5-year ARM averaged 2.99 percent."
Q. Are home sales rising?
A. Sales are slowly but steadily on the rise. Total existing-home sales, which are completed transactions that include single-family homes, townhouses, condominiums and co-ops, inched 0.4 percent to a seasonally adjusted annual rate of 5.47 million in January from a downwardly revised 5.45 million in December, according to the National Association of Realtors.
"Sales are now 11.0 percent higher than a year ago - the largest year-over-year gain since July 2013 (16.3 percent)."
Lawrence Yun, NAR chief economist, says existing sales kicked off 2016 on solid footing, rising slightly to the strongest pace since July 2015 (5.48 million).
"The housing market has shown promising resilience in recent months, but home prices are still rising too fast because of ongoing supply constraints," Yun said. "Despite the global economic slowdown, the housing sector continues to recover and will likely help the U.S. economy avoid a recession."
• Email Jim Woodard at storyjim@aol.com.
© 2016, Creators Syndicate