June 22nd, 2011
Econintersect: Piecing together sources of real time updates for the real estate market continue to show that the seasonal spring / summer buying season is underway, mortgage applications continue at recessionary levels, and that the shadow inventory levels continue to decline.
According to CoreLogic, the shadow inventory (real estate already foreclosed and in the hands of the lender but not yet listed for sale, real estate in the foreclosure process, and seriously deliquent mortgages) have declined to 1.7 million houses in April 2011 from 1.9 million homes one year earlier.
The shadow inventory for real estate is on top of the 3.72 million homes for sale inventory reported by the National Association of Realtors (analysis here). On top of this, CoreLogic also stated:
In addition to the current shadow inventory, there are 2 million current negative equity loans that are more than 50 percent or $150,000 "upside down." These current but underwater loans have increased risk of entering the shadow inventory if the owners' ability to pay is impaired while significantly underwater.
Altos Research published data showing the spring recovery underway but noted that mid-sized cities real estate markets are "showing less volatility than the 20-City Composite over the past three years".
Altos Research is now publishing an Mid-Cities index to track pricing trends in these markets.
The mortgage applications data from the Mortgage Bankers Association decreased in their latest weekly release. Please note that 30% of all real estate transaction do not involve mortgages - the the relevance of this data is suspect.
The Refinance Index decreased 7.2 percent from the previous week. The seasonally adjusted Purchase Index decreased 2.8 percent from one week earlier.
The average contract interest rate for 30-year fixed-rate mortgages increased to 4.57 percent from 4.51 percent, with points decreasing to 0.91 from 1.04 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
Graph hat tip to Calculated Risk:
See also GEI Analysis article on the shadow inventory.