MORTGAGE RATES: This month it was reported that the average rate on 30 year fixed mortgages fell 3.56 % with the 15 year fixed rate falling to at 2.86 % these are
lowest fixed mortgage rates in over 60 years.
Despite these historically low mortgage rates and affordable home prices, first time buyers who are the back bone of the real estate market are being shut out of the market by strict lending standards. The lending industry once to lenient now is way to strict and so qualified buyers are finding it near impossible to secure a home loan. When they are able to get financing they find they are in competition with investors who pay cash for a dwindling supply of re homes to buy.
HOME EQUITY STATS: Currently about 25% of all mortgages residential properties owe more on their homes then they are worth, called negative equity. However that is a decline of about 25% from the fourth quarter
of 2011.
There are about 2.5 million borrowers with less then 5% equity in their homes, any further declines in value could result in negative equity but on the other hand any improvements could result is there equity increasing. For these owners teetering right on the edge of mortgage insolvency its critical that the recent positive housing trends hold and continue to improve.
While both negative equity and near-negative equity mortgages currently account
for almost 30% of all mortgaged residential properties this is still down considerably from the 4th quarter of 2011 by almost 30%.
Foreclosure (shadow inventory) Update: Over the course of the US housing meltdown there were multiple millions of homeowners defaulting on their mortgages. With so many bad loans and so many problems proving ownership through a proper paper trail Lenders were taking 2 years and longer to process these non paying owners before finally removing them from these homes. This was with just the homes that the banks let the market know about, the un-disclosed inventory was known as the "shadow Inventory."
Courtesy The Bonddad Blog: Shadow inventory has been declining, as of 4/2012 there was only a four-month’ supply. This is the lowest level in over 3 years. In April the total shadow inventory dollar volume was $246 billion , down $24 Billion year over year and also three-year low.
All in all the real estate market is getting better, though in fits and stalls. Up one month down another, one stat improves one declines. While the overall direction looks good it is up in the air on its final destination because for the real estate market to dramatically improve our economy must be on solid footing which it is not. Unfortunately our economic news of late is not good, to many questions remain and not enough serious solutions are being proposed. Where our economy goes so goes our real estate market for everyones sake I hope somebody does something that will bring America back.
