October 10th, 2013
Amid uncertainty as the government shutdown persists, the housing market has actually received a number of positive reports lately. Foreclosure activity has dropped, numerous cities are seeing underwater mortgage recovery and 52 metro area housing markets are now back to normal pre-recessionary levels.
Foreclosures fall over past year
A recent report from research analysis firm CoreLogic found that foreclosures on U.S. homes decreased 34 percent over the last year. In August, there were about 48,000 foreclosures across the country, compared to 72,000 one year prior, MarketWatch reported. This improvement still hasn’t brought foreclosures down to pre-recessionary levels: Between 2000 and 2006, the average number of completed foreclosures per month was only 21,000 – but it does suggest significant recovery.
“The data are the latest sign of a recovering housing market as bad loans work their way out of the system and new mortgages for borrowers with better credit take their place,” said the MarketWatch report. “Also, rising home prices and relatively low mortgage rates are helping troubled owners sell or refinance their homes, reducing the pipeline of foreclosures.”
San Jose, Denver lead underwater mortgage recovery
At the same time that foreclosures plummet, a number of cities are leading the nation’s underwater mortgage recovery, according to Zillow’s second quarter Negative Equity Report. Forbes pointed out the top 10 markets that have shown the greatest year-over-year improvement, with San Jose stealing the top spot.
The report showed that the number of San Jose homeowners with negative equity dropped 44.9 percent over the past year. This recovery can likely be attributed to the metro area’s incredible gains in housing prices lately. According to Forbes, it saw a 24 percent year-over-year jump in housing values in August.
Closely following San Jose is Denver, where negative equity declined 43.3 percent year-over-year. Like the Californian city, 97 percent of Denver homes saw their value rise in August, Forbes reported. The future continues to look bright, as well. According to the source, analysts expect that by this time in 2014, at least 13,165 homeowners in the Colorado capital will have regained positive equity.
Even more metros get back to pre-recessionary levels
While the San Jose and Denver housing markets are progressing well, the National Association of Home Builders/First American Leading Markets Index, released Oct. 7, reported that a whopping 52 metro areas across the United States have now either returned to or exceeded their housing activity levels from prior to the recession.
In fact, the index found that the overall U.S. housing market is “running at 85 percent of normal activity.” This is a major step forward for the nation’s economy as a whole.