This graph shows the number of distressed loans by category. The bottom category is the foreclosure inventory, which as you can has been steadily rising but the increase over the last 2 quarters of 2009 tempered off some. The green group are foreclosures started which have also decreased in the last quarter of 2009. this is, as I will talk about it more later on, due to pressure on mortgage companies to modify distressed loans and minimize the numbers going into foreclosure. Many states have also put moratorium on foreclosures towards the end of the year. The pink group are mortgages 90+ days past due which have also leveled out at the end of 2009. finally is the orange group, which are newly delinquent loans and that is the most positive news, showing that loans entering delinquent status are decreasing and possibly indicating that the foreclosure crisis in 2010 might not be as bad as was in 2009.
Transcript of "Real Estate Market - Return to Normalcy"
Return to Normalcy<br />Lawrence Yun, Ph.D.<br />Chief Economist<br />NATIONAL ASSOCIATION OF REALTORS®<br />Presentation at Macroeconomic Advisers Meeting <br />Washington, D.C.<br />December 8, 2010<br />
Existing Home Sales (Closings)<br />Tax Credit Impact<br />
Compelling AffordabilityMonthly Mortgage to buy a Median Priced Home<br />
QE2 Inconsequential if Too Strict Underwriting Standards?Fannie and Freddie Backed Mortgage Loan Performance<br />Source: Federal Housing Finance Agency <br />
Distressed Loans and Shadow Inventory<br />Bad loans are nearly always made in good times. But recently originated loans are performing very well.<br />
Underwater Homeowners and Short-Sales<br />11 million underwater homeowners <br />Overestimate by CoreLogic?<br />75 million total homeowners <br />Short-sales and Foreclosures: about 1/3 of existing home sales…1.5 million per year<br />Assume ½ underwater homeowners stay put by choice (and not go through distressed sale)<br />5.5 million out of pocket (CoreLogic data) … 7% lower sales<br />4 million out of pocket (NAR estimate based on Fed data) … 5% lower sales<br />2010 Existing + New Home Sales are … 21% lower sales versus 2000<br />
Homeowner Vacancy Rate(0.8% point above normal = 600,000 above normal)<br />
Newly Built Home Inventory<br />In thousands<br />
Months Supply of Inventory and Real Price Growth(Historic Avg. = 7.3 months and 0.5% real price anualized growth)<br />