In February, the foreclosure inventory rate was the lowest for any month since November 2007, according to new numbers released by CoreLogic. Their February 2016 National Foreclosure Report shows foreclosure inventory was down 24 percent from one year earlier and now represents just 1.1 percent of all homes with a mortgage. Anand Nallathambi, president and CEO of CoreLogic, says home price increases are among the leading causes behind the improvement. “Home price gains have clearly been a driving force in building positive equity for homeowners,” Nallathambi said. “Longer term, we anticipate a better balance of supply with demand in many markets which will help sustain healthy and affordable home values into the future.” Also in the report, the serious delinquency rate – which refers to mortgages that are 90 days or more past due – fell 19.9 percent over the past year and is also at its lowest point since 2007. Just as foreclosure inventory has been helped by rising home prices, delinquency rates have dropped as job creation and household income have improved. More here.
When homeownership is discussed as a way to build wealth, what is really being talked about is equity. Equity refers to the value of a property minus the amount still owed on the mortgage. A homeowner will gain equity when home prices increase and also as they pay off their mortgage. In other words, equity is the part of a property’s value that belongs to the owner. If they sell that house, that money is their’s. Naturally, increasing equity is a good thing for current homeowners and among the main motivating arguments for homeownership. After all, when you pay rent, that money’s gone forever. In recent years, rebounding home prices have led to significant gains in home equity. For example, CoreLogic’s Q4 2015 Equity Report found home equity up 11.5 percent over the same period the year before. It was the 13th consecutive quarter of double-digit improvement. Anand Nallathambi, CoreLogic’s president and CEO, said the number of homeowners with more than 20 percent equity is rising rapidly. “Higher prices driven largely by tight supply are certainly a big reason for the rise, but continued population growth, household formation, and ultra-low interest rates are also factors,” Nallathambi said. “Looking ahead in 2016, we expect home equity levels to continue to build, which is a good thing for the long-term health of the U.S. economy.” More here.
Equity refers to the value of a property minus the amount owed on the mortgage. In short, having positive equity means your home is worth more than you paid for it. In other words, it’s good news. That’s why CoreLogic’s second quarter equity report is an encouraging sign for both current homeowners and potential buyers. According to the report, 759,000 properties regained equity in the second quarter, raising the number of mortgages that are now lower than their property’s value to nearly 46 million, or 91 percent of all mortgaged properties. That is a big improvement over where things were following the housing crash, when millions of homeowners saw their homes lose value and were plunged into negative equity. CoreLogic’s CEO and president, Anand Nallathambi, says the negative equity epidemic is lifting for much of the country. “The biggest reason for this improvement has been the relentless rise in home prices over the past three years which reflects increasing money flows into housing and a lack of housing stock in many markets.” But, though the number of homes available for sale has been low in some markets, a rising number of current homeowners with positive equity could mean more homes put up for sale, giving prospective buyers more choices and reducing the rate of price gains. More here.