The homeownership rate declined further in the latest data, with 65.5% of households owning their homes in the first quarter of 2012. At the peak, 69.4% were homeowners. Though a 5% decline may not sound too large to a casual observer, in a country with over 100 million households the figure represents a swing of 5 million families and households.
Distressed sales go through several stages – the initial overdue status for mortgage payments, the actual foreclosure by the financial institution, and the final sale of the property, frequently by Realtors® through the MLS.
- Measured at the MLS sales level, distressed sales have hovered in the 30 to 35 percent range for a number of years, with heavy sales concentrations in a few states. According to the latest Realtors® Confidence Index, as of March 2012, distressed sales were 29 percent of total sales. Realtors® in some areas are reporting shortages in inventory as demand picks up and have indicated that additional distressed properties on the market could be sold relatively easily.
- The Existing Home Sales market is bifurcated, with distressed properties frequently being sold at significant discounts to market, frequently in subpar condition when going to market, and reported to be popular with investors seeking bargain prices.
- The level of distressed sales fluctuates from month to month.
- Currently Realtors® in a number of states are reporting shortages of inventories of distressed real estate: the market is clearing distressed properties from the market at a rapid rate.
A number of Realtors® responding to the Realtors® Confidence Index March Survey indicated continued tight credit conditions: in a number of cases prospective home buyers had difficulty in qualifying for a loan. A comparison of FICO scores for loan transactions as reported by Realtors® responding to the RCI over the February and March time span compared with FICO scores reported by Fannie Mae’s “Acquisition Profile by Key Product Features”—showing mortgage lending and refinancing conditions in the pre-boom normal housing markets of a few years ago– shows that credit availability to lower scoring applicants appears to have declined. Realtors® provided FICO information based on their understanding of the credit situation; in some cases the information for clients was estimated. However, overall the data seem to substantiate relatively tight credit conditions.