Saturday, November 16, 2013

Housing Market Approaches Pre-Crash Statistics

For the last several months, news agencies have reported on the housing market recovery.  Now, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey, it looks as if the numbers actually reflect a return to normalcy.  Mike Fratantoni, MBA’s vice president of research and economics, emphasized, “we are now back to pre-crisis levels by almost any measure.”  He cited the current percentage of home loans that are in delinquency or foreclosure across the country—only 9.75 percent as of the third quarter.  And indeed, according to an article in, this is “the lowest level in about five years.”
Does this mean families are no longer struggling to make mortgage payments and avoid foreclosure?  The U.S. market in general is trending toward a complete recovery, but homeowners across the country continue to face financial difficulties when it comes to making monthly mortgage payments and remaining in their homes.  If you have questions about how the market recovery is likely to affect you, or if you have continuing concerns about foreclosure, don’t hesitate to contact the experienced attorneys at the Emerson Law Firm.
Details of the Mortgage Bankers Association Survey
So, the percentage of mortgages in foreclosure or delinquency has dropped.  But what about other facts and figures?  Jay Brinkman, the chief economist for research and education at MBA explained that the survey results actually reflect “major drops across the board in all types and categories” with only “a few minor exceptions.”  For instance, the recent statistics show drops in 30-day, 60-day, and 90-day delinquencies, in addition to the total national foreclosure inventory.
What’s at the heart of fueling this new push toward real estate recovery? According to Brinkman, it’s “the higher quality loans that have been written since the recession.” Indeed, he emphasized that the mortgage delinquencies we’re continuing to see largely aren’t a result of new loans.  Rather, they’re the “result of problems of the past.” Brinkman seemed to allude to the major mortgage-serving problems that have emerged in connection with big bank settlements over the past several months.
In fact, as of the third quarter, the national delinquency rate came in at 6.41 percent.  That number might be difficult to understand if you’re not really familiar with the way these delinquency rate percentages work, but we can make it clear for you: this is the “lowest level since the second quarter of 2008,” reported.  In other words, it’s the lowest level since housing market statistics reflected some of the most shocking price drops in modern times.
Can We Link Recovery to Certain Groups or Geographic Areas?
Borrowers who have obtained mortgage loans through the Department of Veteran’s Affairs (VA) might be catalyzing the numerical trends toward market recovery.  It looks like the delinquency rate among loans issued by the VA are actually at their lowest since 1980, coming in at only 5.41 percent.  And a large percentage of the current VA loans in good standing are part of the “higher quality loans” that Brinkman referred to, as about 40 percent of them have been written in the months and years following the peak of the housing crisis.
And when it comes to certain geographic areas, even some of the hardest-hit states have shown some improvement.  The state of Florida continues to display the highest foreclosure inventory in the country with 9.48 percent, but the MBA study indicated that even the foreclosure inventory in Florida had shown a slight decline.
At the same time, however, the states of New York and New Jersey actually showed an increase. Brinkman emphasized that this might not reflect any national trends, however.  “We’re back to the point where it’s underlying economic factors impacting the market,” he told   
Do you have questions or concerns about the housing market in the Chicago area?  Experienced Illinois real estate attorneys at the Emerson Law Firm have years of experience handling these cases and can answer your questions today.
See Related Blog Posts:
Housing Market on the Rise in the Chicago Area?

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