This week, reports released indicated that existing housing sales figures in the U.S. finished December with a strong 5% increase, putting the statistic in the black for the year and lending credence to the notion that a housing crisis recovery could be in the works. Now, additional data suggest that foreclosure rates and mortgage loan delinquencies dropped in 2011 – meaning that 2011 could be, in hindsight, the beginning of the end to the crisis.
The data – compiled by Lender Processing Services – suggest that overall mortgage delinquencies fell by a substantial 7.7% from December 2010 to December 2011. This would indicate a current mortgage delinquency rate of roughly 8.15%, trending downwards.
Foreclosure rates fell by a lesser margin – 1% - but in this environment, any drop is good news. The current rate is hovering around 4.11% across the country.
The downside to the data released resides in some ominous numbers that suggest we are not out of the woods yet. Approximately 1,792,000 homes are at least 90 days delinquent, which is usually when they turn into home foreclosures. The only reason why many of these seriously-delinquent homes have not already become foreclosure properties is due to the backlogged foreclosure process that still remains mostly clogged in many areas of the country. (The top states with the most foreclosures and delinquencies as of December 2011? Florida, Mississippi, Nevada, New Jersey, and Illinois.)
Still, analysts are open to the prospect that 2012 – once thought to be the beginning of a new flood of foreclosure listings that were delayed by foreclosure fraud and robo-signing scandals – could actually be better than expected for the real estate industry. More homes are being sold, builders are optimistic about new customer prospects, and low mortgage rates are enticing more investors and homebuyers to enter the real estate market.
Going forward, the market will need to continue the current trend of falling foreclosure rates and increasing existing home sales. A major reworking of the Home Affordable Refinance Program, called HARP 2.0 by some, will more than likely debut at the end of the first quarter and could eventually lead to hundreds of thousands of Americans avoiding delinquency and saving money through lower monthly payments.
Until then, analysts are continuing to wait to see if consumer demand is able to step up and pick up home sales activity that is still well below desired levels. If these data are any indication, though, that demand may be here sooner than later.
