Reports Continue to Show Home Price Declines

CoreLogic and Lender Processing Services
(LPS) have each released their most recent Home Price Indices.  CoreLogic’s HPI covers December; LPS’s covers
the month of November.  Here is a quick
review of each.

LPS found that the average home price
for transactions during November was $199.000, down 0.6 percent from the
October average.  This is the fifth consecutive
month that this index has declined. 
Preliminary information on December sales indicates that the HPI might
have lost another 0.8 percent during that month.

When the market peaked in June 2006 the
total value of the U.S. housing inventory covered by LPS was $10.8
trillion.  The value has declined 30.6
percent to $7.5 trillion since that time.

Price changes were consistent across the
country, increasing in 13 percent of the ZIP Codes in the database.  Higher priced homes had somewhat small price
declines than those in the middle and low price categories with the range from
high to low covering only 13 basis points.

CoreLogic issues two sets of indices,
one including sales of distressed properties, the other excluding those
sales.  The HPI for all sales decreased
1.4 percent in December and was down 4.7 percent on an annual basis, the fifth
year in a row that this HPI has declined.   
The Index covering market sales was 0.9 percent higher than in December
2010 which, Core Logic says, gives an indication of the impact distressed sales
are having on the market.  The HPI excluding distressed sales posted its first month -over-month
gain since last July, rising 0.2 percent. 

Of
the top 100 Core Based Statistical Areas as measured by population, 81 showed
year-over-year declines in November compared to 80 that were down on a monthly
basis in November compared to October.

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OBAMA ADMINISTRATION RELEASES DECEMBER HOUSING SCORECARD

WASHINGTON- The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury today released the December edition of the Obama Administration’s Housing Scorecard – a comprehensive report on the nation’s housing market. Data in the December Housing Scorecard show some subtle improvements in the market over the past year, but underscore fragility as the overall outlook remains mixed. For example, new and existing home sales rose compared to the prior month and remain higher than a year ago, and homes are more affordable than they have been since 1971. Median-income families today have nearly double the funds needed to cover the cost of the average home. However, home prices showed a slight dip from the prior month and remain below year ago levels. The full report is available online at www.hud.gov/scorecard.

(Video) House of the Day: A Caribbean Getaway

Today’s House of the Day is a St. Lucia compound, overlooking a World Heritage site, that serves as a vacation escape for its owner. This compound, named Caille Blanc Villa, is comprised of five free-standing suites in Soufrière, St. Lucia. The suites converge in a common courtyard, with access to an infinity pool. It’s listed for $10 million, with quarter shares available for $2.5 million. (Slide show.)

Hot and Smart Home Products

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LPS: Mortgage Originations Among Highest Quality Ever in 2010-2011

The Lender Processing Services (LPS) Mortgage Monitor Report for December show
improvement in a number of the metrics it tracks. Many measures of delinquency
rates are down, inventories are clearing in some states, and recent loan
originations are “among the best quality on record.”

The overall delinquency rate did not
change from November, remaining at 8.15 percent but is down 7.7 percent since
December 2010.  Seriously delinquent
loans, those 90 or more days overdue or in foreclosure decreased 0.6 percent to
7.67 percent, a -5.9 percent change from one year earlier.

The foreclosure rate which was 4.16
percent in November fell to 4.11 percent in December and is down 1.0 percent
year-over-year.  Foreclosure starts
showed the most dramatic change.  There
were 159,092 starts in December compared to 165,205 in November, a -3.7 percent
change and starts were 38.7 percent below the level in December 2010.   This is the lowest level of foreclosure starts
since at least 2008.

While 90+ day delinquencies are about
the same in judicial and non-judicial states there remains a large distinction between
these states in other measures of foreclosure activity.  LPS found that half of all loans in
foreclosure in judicial states have not made a payment in more than two years
as the foreclosure process drags on.  The
foreclosure sales rate in non-judicial states is four times that in judicial
states (6.8 percent vs. 1.6 percent). 
Foreclosure inventories stand at about 3.5 percent nationwide; in
non-judicial states those inventories are about 2 percent while in judicial
states they are 2.5 times greater – over 6 percent.  Still, pipeline ratios (the time it would
take to clear through the inventory of loans either seriously delinquent or in
foreclosure at the current rate of foreclosure sales) has declined
significantly from earlier this year in judicial states while remaining flat in
non-judicial states.


Loan
originations
(month ending November 11) numbered 537,720 compared to 597,888 in
October, a decline of 10.1 percent and 29.3 percent below originations one year
earlier.  The loans originated over the
last two years
, however, are among the best quality on record according to
LPS.  2010-11 vintage originations showed
90-day default rates below those of all other years, going back to 2005.
December origination data also shows that recent prepayment activity – a key
indicator of mortgage refinances – has remained strong, with 2008-09
originations, high credit score borrowers and government-backed loans having
benefited the most from recent, historically low interest rates.

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