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The latest industry data finds more people purchasing existing homes and more lenders repossessing homes that fell into foreclosure.
The National Association of Realtors (NAR) reported that existing-home sales in July increased two percent to a seasonally adjusted annual rate of 5.59 million in July from a downwardly revised 5.48 million in June. The level of sales activity last month remained at the highest pace since February 2007 (5.79 million) and represents the tenth consecutive months of year-over-year sales.
NAR also reported that last month’s median existing-home price for all housing types was $234,000, up 5.6 percent from last year. This new price increase is the 41st consecutive month of year-over-year increases for median existing-home prices.
Alas, the NAR data also pointed to continuing problems that percolate throughout the market: the total housing inventory declined 0.4 percent to 2.24 million existing homes available for sale, and is now 4.7 percent lower than a year ago (2.35 million). The unsold inventory is at a 4.8-month supply at the current sales pace, down slightly from 4.9 months in June. And the percent share of first-time homebuyers declined in July for the second consecutive month, falling from 30 percent in June to 28 percent; in July 2014, 29 percent of all buyers were first-timers.
“Despite the strong growth in sales since this spring, declining affordability could begin to slowly dampen demand,” said NAR Chief Economist Lawrence Yun. “Realtors in some markets reported slower foot traffic in July in part because of low inventory and concerns about the continued rise in home prices without commensurate income gains.”
On the plus side, NAR found that distressed sales—defined as foreclosures and short sales—dropped to seven percent in July from eight percent in June; this is the lowest share of distressed sales since NAR began tracking this data in October 2008.
Distressed housing was also the focus of RealtyTrac’s July 2015 U.S. Foreclosure Market Report, which found 124,910 U.S. properties with foreclosure filings—default notices, scheduled auctions and bank repossessions—last month, a seven percent spike from the previous month and up 14 percent increase from last year. July saw the fifth consecutive month with a year-over-year increase in overall foreclosure activity—a turnaround from 53 consecutive months of decreased activity.
RealtyTrac also found bank repossessions at 30-month high, with year-over-year increases in 44 states. A total of 46,957 properties repossessed by lenders were recorded last month, a 29 percent rise from June and a stunning 81 percent leap from a year ago; last month marked the highest level of repossessions since January 2013.
However, RealtyTrac also found a total of 45,381 U.S. properties that started the foreclosure process for the first time in July, down eight percent from the previous month and down nine percent from a year ago. Last month marked the lowest level of foreclosure starts since November.
Daren Blomquist, vice president at RealtyTrac, viewed the drop in foreclosure starts and the increase in repossessions as evidence of lenders “flushing out old distress rather than new distress being pushed into the pipeline.”
Separately, the HOPE NOW alliance reported that approximately 411,000 homeowners received non-foreclosure solutions from mortgage servicers during the second quarter. HOPE NOW estimated that for every foreclosure sale in the second quarter, there were nearly five solutions offered to homeowners by servicers.
“Our data continues to show a consistent trend of non-foreclosure solutions outpacing completed foreclosure sales, which means that millions of families are receiving the help they need to avoid foreclosure,” said Erik Selk, HOPE NOW’s executive director. “The picture shows that more homeowners have been helped by the industry than have gone through a completed foreclosure. Completed foreclosures since 2007 are approximately 6.1 million compared to 24 million non-foreclosure solutions.”