December Housing Scorecard Shows Subtle Improvements in Housing Market

Earlier this month, the Obama Administration released its December Housing Scorecard.  According to HUD, the housing market has shown some improvement over the past year, but the recovery remains fragile.

According to the report, the average mortgage interest rate for a 30-year, fixed rate mortgage is 3.95 percent, largely unchanged from the previous month, but almost 1 percent lower than in December 2011.  New home sales have risen slightly to 26,300, and existing home sales have increased to 368,300, which is 34,000 higher than the monthly existing home sales one year ago, when existing home sales hit their lowest point since the start of the housing crisis.

The data also shows that homes today are more affordable for median-income families than they have been at any point since 1971.  The average family looking to buy a single-family home has nearly double the funds needed to purchase an average home.  In 2006, at the peak of the housing market’s rise, the same family had barely the income necessary to purchase a home.  Recent gains in affordability are the result of 33 consecutive months of declining home prices from the July 2006 peak through April 2009 as well as historically low mortgage interest rates.

Mortgage delinquency rates have held steady, according to the report, while foreclosures and completions have dropped in the past month.  The delinquency rates of prime, subprime, and FHA mortgages increased slightly from November to December.  New foreclosure starts dropped by 6,000 to 71,700, and foreclosure completions dropped by 11,000 to 56,100, the lowest level since early 2008.

Also, the Department of Treasury released the November Making Home Affordable Report, which includes updates on Treasury's foreclosure relief programs, including HAMP.  According to the report, homeowners who have received a permanent modification through HAMP have saved a median of $530 per month on their mortgage payments.  Of the eligible homeowners entering a HAMP trial modification since June 2010, 83 percent have received a permanent modification after an average trial period of 3.5 months.  Overall, 909,953 permanent modifications have been started under HAMP.