January housing scorecard yields positive data

February 12th, 2014

As more homeowners have seen equity during the housing recovery, foreclosure rates have declined to pre-recession levels.

The latest housing scorecard from the Departments of the Treasury and Housing and Urban Development showed that mortgages performed well in 2013, an indication that buying a home continues to be a worthwhile investment for Americans following the housing recovery.

According to the report – which is a collection of recent industry data on the state of the housing market in regard to mortgage originations, construction statistics, distressed properties, home sales and other privately and publicly funded data – showed that foreclosure starts in 2013 reached pre-recession levels, falling to the lowest levels since 2005. Furthermore, total home equity in the U.S. went up to 3.4 trillion in 2012 and 2013 as a result of rising home prices.

“The January Housing Scorecard shows that the Obama administration’s efforts continue to have a positive effect on the housing market,” said Kurt Usowski, HUD deputy assistant secretary for economic affairs. “In 2013, the number of U.S. properties which started the foreclosure process was down 33 percent from 2012, while sales of previously owned homes rose by 9.1 percent. With foreclosures down, home sales up and equity continuing to grow, the housing market continues to make slow, but steadily improving progress.”

Making headway with the Making Home Affordable program
In addition to providing updates on the aforementioned dimensions, the Housing Scorecard details the progress of the Making Home Affordable program and its subsidiaries.

The Home Affordable Modification Program continued to help many homeowners avoid foreclosure through other exit strategies. In December, 13,942 trial modifications were initiated. Since the program began in spring 2009, 2.152 million modifications have been started and there are 926,792 active modifications.

The Home Affordable Foreclosure Alternatives program, which helps homeowners avoid foreclosure through short sales and deeds-in-lieu, also made significant strides. According to the report, more than 258,000 homeowners completed the HAFA program and nearly 11,000 transactions were completed since the previous report.

“This month’s Housing Scorecard shows the continued need for and progress of the Making Home Affordable program,” said Tim Bowler, Treasury acting assistant secretary. “January’s Making Home Affordable report shows a steady increase in the cumulative number of homeowners receiving permanent mortgage modifications, while more than 258,000 homeowners have found alternatives to foreclosure, participating in a short sale or deed-in-lieu through the Home Affordable Foreclosure Alternatives Program.”

HARP reaches new milestone
In addition to the success of the HAMP and HAFA programs, the Home Affordable Refinancing Program has been instrumental in helping homeowners avoid foreclosure and keep their homes. The Federal Housing Finance Agency recently reported that HARP has helped more than 3 million homeowners refinance their mortgages as of November. Additionally, 1.9 million of those transactions were completed in 2012, when the housing recovery started to pick up steam. FHFA Director Mel Watt noted that his agency will continue to get valuable resources to homeowners and help the nation have a strong comeback from the mortgage crisis.

Although there were fewer HARP refinances processed in November than October – 38,732 compared to 46,387 – the decrease also can be positive, as a decline may indicate that fewer homeowners need assistance to pay their mortgage each month.

Furthermore, homeowners who refinanced through HARP typically had stronger mortgage performance, as evidenced through lower delinquency rates, compared to those who did not take advantage of the program but were eligible.

Renewed hope
Current and prospective homeowners may take the data as a sign that a home purchase is once again a viable investment following the housing downturn. Moreover, there are a number of options available to help them keep their home and avoid foreclosure.