US foreclosure activity falls to all-time low

Foreclosures and repossessions in the US dropped to their lowest ever levels in 2021, a new report issued jointly by ATTOM and RealtyTrac has found.

 

Figures from the property analytics firm and RealtyTrac, a marketplace specializing in foreclosure and distressed properties, show that the number of properties in foreclosure last year dropped by 29% compared to 2020 and by a staggering 95% from a peak of almost 2.9 million in 2010, representing the lowest level since records began in 2005.

The Year-End 2021 US Foreclosure Market Report gathered data over the course of 2021, based on publicly recorded and published foreclosure filings collected in more than 3,000 counties across the country, accounting for more than 99% of the US population.

In total, there were 151,153 properties with foreclosure filings. These included default notices, scheduled auctions and bank repossessions.

The report also revealed that repossessions in 2021 dropped to the lowest ever level. Lenders repossessed a total of 25,662 properties through foreclosure last year, representing a 49% drop compared to 2020. This was 98% down from a peak of more than one million properties in 2010.

According to Rick Sharga, executive vice president at RealtyTrac, the figures show that predictions of massive foreclosures had been wide of the mark.

He said: “The COVID-19 foreclosure tsunami that some people had anticipated is clearly not happening. Government and mortgage industry efforts have prevented millions of unnecessary foreclosures, and while it’s likely that we’ll see a slight increase in the first quarter, we probably won’t see foreclosure activity back to normal levels before the end of 2022.”

However, he pointed out that the government’s foreclosure moratorium and the mortgage forbearance program had kept foreclosure starts “artificially low over the past year”.

He said: “While the recovering economy should prevent a huge increase in defaults, we should see a gradual increase in foreclosure activity as these programs expire, and servicers exhaust all loan modification options for delinquent borrowers.”

The report included new data for December, showing there were 17,971 US properties with foreclosure filings, down 8% from the previous month but up 65% from a year ago.

Sharga added: “We believe that repossessions will continue to be lower than normal throughout 2022. Homeowners have a record amount of equity – over $23 trillion – and over 87% of homeowners in foreclosure have positive equity. This means that most borrowers will have an opportunity to sell their house at a profit rather than lose everything to a foreclosure auction.”

Broken down by states, Illinois, Florida and California reported the largest number of properties in foreclosure (REOs), respectively.

Metropolitan areas with a population greater than one million with the greatest number of REOs included Chicago, Illinois (1,733 REOs); St. Louis, Missouri (1,255 REOs); and New York (814 REOs).

Foreclosure starts were also at a record low throughout the country, down by 30% from 2020 and 96% from a peak in 2009.

Only four states bucked the trend with an annual increase in foreclosure starts – South Dakota (up 20%); Vermont (up 36%); North Dakota (up 71%); and Nevada (up 85%).

Additionally, three metropolitan areas with a population greater than one million saw an annual increase. They included Birmingham, Alabama (up 4%); Miami, Florida (up 17%); and Las Vegas, Nevada (up 142%).

MPA spoke to a number of brokers about the data. None were surprised by the figures, and all coincided with Sharga’s views regarding positive equity.

Yury Shraybman (pictured top), broker at Innovative Mortgage Brokers in Philadelphia, said: “People have a lot more equity in the property than they did before. The average person has only about 40% or so on the loan, so there’s approximately 60% equity in the property.

“Because of that they’re not going to allow foreclosure or repossession – they’re going to sell that property and take a profit. That’s the reason why those numbers are low, and it totally makes sense,” he said.

Kirk Tatom (pictured immediately above), the president of Dallas-based Tatom Lending, agreed that homeowners’ equity had helped to stave off foreclosures.

He said: “The more skin you got in the game, the less likely you are to walk away from that property. They’ll default on their credit cards, they’ll stop eating out, they will take a second job or start selling their belongings – they’ll do whatever it takes.

“When you have such an increase in property values, as we have had over the last 36 to 48 months, people will not walk away from that, they just can’t lose that money.”

Dalton Elliott, director of sales and customer experience at Lima One Capital, said the major difference this time around was that people had been financially cushioned from the worst aspects of a health crisis.

“Much of that is tied back to the multiple lifelines that the government threw out over the last 18 months. That allowed people to have enough money in their pocket. Pumping money into the economy made sure we didn’t cross the line from recession to depression,” he said, adding that in his view it had been “a positive thing for the US economy”.

Florida Company Offering Workers a Home in Giveaway

The “Great Resignation” has become a pressing threat to companies, who have been witnessing a large number of their workforce leave. More companies are offering bonuses or higher pay to keep employees from leaving. One central Florida company believes they found the perfect hook to keep their workforce in place: A home giveaway. The company will offer two newly built homes– mortgage-free.

Mechanical One, a newly opened air conditioning and plumbing company of about 100 employees in Altamonte Springs, Fla., says it will hold a drawing and two employees will win the free houses. The company has purchased two lots for three-bedroom, two-bath homes. They’re allocating $500,000 for the project.

“My passion is really trying to reinvent employee appreciation,” Jason James, president and CEO, told the Orlando Sentinel last month about the drawing. “Our business model is really, if we take care of our people, they are going to do more for us than any marketing budget.”

James said a home incentive seemed more luring than a car or vacation giveaway. “Many of our employees own a home already, but a lot of them rent,” he adds.

Eligible employees for next December’s drawing must be with the company for a full year. They also must take a financial literacy class, which will be paid for by the company, and complete 20 hours of community service at a nonprofit of their choosing.

Anthony Mitchell, an operations manager for Mechanical One, said employees are excited about the chance to win a free home. “There’s nothing like coming home to the wife and saying, ‘Honey, I’m bringing home a new house,’” he said.

 

Source: “Workers Who Stick With This Company Could Get a Mortgage-Free Home,” Orlando Sentinel (2021) [Log-in required.] and “Florida Company Offers 2 Free Homes to Lure, Keep Workers,” The Associated Press (2021)

US home sale price surges to new high

The median US home sale price surged to an all-time high last week, according to new data from Redfin.

The firm revealed that the median home sale price increased by 16% year-over-year to $365,000 during the week ending January 09.

Redfin pointed to lingering supply issues and increasing demand as reasons for the surge in prices.  “Prices keep climbing because the supply drought keeps deepening while demand increases,” the firm said in a statement. “The number of homes for sale fell to a new low as listings hit the market at a slower rate than they did early last year. Yet homebuyer activity—as measured by the Redfin.  Homebuyer Demand Index—jumped 9%. Mortgage rates rose to 3.45% during the seven days ending January 13, making homebuying more expensive as overall inflation hit a 40-year high.”

 

“Homebuyers are touring nearly every home that comes on the market, waiving every contingency, offering $100,000 over asking price, and still losing out to 9+ other offers,” said Jennifer Ciacci, a Redfin real estate agent in Portland, Ore. “As competitive as the market is right now, I advise buyers not to write an offer on a home they don’t really like. The home needs to work for what they want and need, and if it checks off those boxes, that’s when you go all-in and take your best shot. But protect your heart; this isn’t an easy market.”

“The stage is now set for the most competitive January housing market in recorded history,” said Daryl Fairweather, chief economist at Redfin. “Buyers are pouring into the market to claim a home before mortgage rates rise further as new listings slow to a trickle. The conditions are becoming increasingly challenging for first-time homebuyers, who will have to compete against more experienced buyers who are willing to do whatever it takes to win. But I expect that by the time mortgage rates increase to 3.6%, competition will settle down quickly to levels similar to late-2018.”

I have a Dream: In honor of Dr. Martin Luther King Jr.

I have a dream that one day on the red hills of Georgia, the sons of former slaves and the sons of former slave owners will be able to sit down together at the table of brotherhood.

I have a dream that one day even the state of Mississippi, a state sweltering with the heat of injustice, sweltering with the heat of oppression will be transformed into an oasis of freedom and justice.

I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character. I have a dream today.

I have a dream that one day down in Alabama with its vicious racists, with its governor having his lips dripping with the words of interposition and nullification, one day right down in Alabama little Black boys and Black girls will be able to join hands with little white boys and white girls as sisters and brothers. I have a dream today.

I have a dream that one day every valley shall be exalted, every hill and mountain shall be made low, the rough places will be made plain, and the crooked places will be made straight, and the glory of the Lord shall be revealed, and all flesh shall see it together.

This is our hope. This is the faith that I go back to the South with. With this faith, we will be able to hew out of the mountain of despair a stone of hope. With this faith we will be able to transform the jangling discords of our nation into a beautiful symphony of brotherhood. With this faith we will be able to work together, to pray together, to struggle together, to go to jail together, to stand up for freedom together, knowing that we will be free one day.

This will be the day when all of God’s children will be able to sing with new meaning: My country, ’tis of thee, sweet land of liberty, of thee I sing. Land where my fathers died, land of the pilgrims’ pride, from every mountainside, let freedom ring.

And if America is to be a great nation, this must become true. And so let freedom ring from the prodigious hilltops of New Hampshire. Let freedom ring from the mighty mountains of New York. Let freedom ring from the heightening Alleghenies of Pennsylvania. Let freedom ring from the snowcapped Rockies of Colorado. Let freedom ring from the curvaceous slopes of California. But not only that, let freedom ring from Stone Mountain of Georgia. Let freedom ring from Lookout Mountain of Tennessee. Let freedom ring from every hill and molehill of Mississippi. From every mountainside, let freedom ring.

And when this happens, and when we allow freedom ring, when we let it ring from every village and every hamlet, from every state and every city, we will be able to speed up that day when all of God’s children, Black men and white men, Jews and Gentiles, Protestants and Catholics, will be able to join hands and sing in the words of the old Negro spiritual: Free at last. Free at last. Thank God almighty, we are free at last.

 

Which states are the best and worst to raise a family?

Experts urge affordable housing programs in bid to attract young families

 

Personal-finance website WalletHub has released its report on 2022’s Best and Worst States to Raise a Family.

The survey compared all 50 states across 51 key indicators, including life expectancy, neighborhood support, annual family income and unemployment rates. Housing affordability was also evaluated, and those polled were asked about housing costs and mortgage debt.

Massachusetts came top overall with a score of 65.21 out of 100, followed by New York (61.81) and Vermont in third place. The worst performing states were Louisiana, New Mexico and Mississippi (30.47), respectively.

Iowa, Nebraska and North Dakota were the three states with the best access to affordable housing, while Colorado, Oregon and New York were ranked as the most expensive or least affordable.

Among the most salient points, Utah reported the lowest separation and divorce rates, which were up to 1.7 times lower than in Nevada, the highest at just over 26%.

New Hampshire had the lowest share of families living in poverty, while Mississippi accounted for the highest at 15.5%.

South Dakota reported the lowest average annual cost of early childcare – up to 1.8 times lower than in Nebraska.

Maine listed the fewest number of violent crimes (per 1,000 residents) – up to 7.7 times fewer than Alaska, the state with the most along with Arkansas, Louisiana, New Mexico and Tennessee.

Unsurprisingly, the poorest states also had some of the worst crime, divorce and infant mortality rates.

WalletHub asked a panel of experts for their views, and all welcomed President Biden’s proposals on paid family leave and childcare.

Professor Aruna Jha, from the University of Wisconsin, said banking agreements allowing the purchase of low-cost first homes, as well as access to affordable rental properties, should be high on the list of priorities for states in their efforts to attract young families.

Easy access to amenities, along with a safe downtown area, good governance and jobs that provided “a decent living wage” would also make states more attractive for this demographic group.

In her estimation, employment and economic stability, affordable and ample housing, and healthcare should be the top three priorities for young families.

Patty Kuo, assistant professor of child, youth and family studies at the University of Nebraska, welcomed President Biden’s national proposal to provide access to paid leave, saying it “would benefit the Americans who are currently being left out” as well as those who “have to make impossible choices between a paycheck or physically caring for a child/family member when they need them the most”.

Professor Heidi Stolz, from the University of Tennessee, in Knoxville, was asked how authorities could make states more attractive to young families.

She said: “States can invest in education, and cultivate and feature other family-friendly resources for which they would like to be known.

“But the real issue is providing high-quality building blocks to the families who already reside in the state, and particularly to those who were not able to select a resource-rich community.”

She was highly critical of the US government’s record on social care. “You have to leave the states to understand what a truly terrible job we do of supporting families here.

“Although competition and capitalism are the threads of the cultural fabric of America, resource inequality during childhood is bad for absolutely everyone, in the present, and the future.”

Theresa J. Russo, professor of human development and family studies at the State University of New York, ranked employment opportunities and affordable, safe, and quality housing as the top two indicators to evaluate the best states.

Preston A. Britner, professor of human development and family sciences at the University of Connecticut, said mobility in the US had decreased over the past four decades, despite probably having higher rates of geographic mobility than other industrialized nations.

“The reality is that most families do not move across municipal boundaries, much less state lines,” he said.

By contrast, Steven Meyers, professor of psychology at Roosevelt University, noted that the COVID pandemic had led many people to re-assess where they lived.

He said: “Many people have questioned whether they want to remain in their current jobs, and remote working arrangements have disconnected employment locations from their residences. This has allowed families to reconsider long-held assumptions on where the best place to reside would be.”

Fannie Mae unveils free homeownership education course for first-time homebuyers

Fannie Mae has launched a new homeownership education course in an effort to remove the cost barrier for lower-income borrowers to meet the education requirement for more affordable mortgages.

The free online course, called HomeView, provides comprehensive, easy-to-understand content and resources designed to prepare first-time homebuyers for all stages of the homebuying process.

First-time homebuyers are required to take a homeownership education course that meets the national industry standards to qualify for certain mortgage products, including low down-payment loans. The mortgage giant said it has teamed up with consumers and industry experts (housing counselors, mortgage insurers, government organizations) to ensure HomeView content aligns with these standards.

Users who complete the interactive course and get a score of 80% or higher will receive a certificate of completion, which they can share with their lender to meet the education requirement. There is no limit to the number of times users can take the HomeView modules or access the available resources.

“Fannie Mae is committed to creating equitable and sustainable homeownership opportunities for more people. With HomeView, we are providing aspiring homeowners with free tools and information that will demystify the home buying process and put sustainable homeownership within reach,” said PJ McCarthy, vice president of affordable lending and housing equity at Fannie Mae. “Broadening access to quality, trustworthy homeownership education is a proven first step to empowering homebuyers to become successful homeowners. HomeView puts people on the path to buying a home while preparing them for long-term success.”

The pre-purchase homeownership course includes seven interactive learning modules:

• Knowing When You’re Ready


• Saving for Homeownership


• Understanding the Mortgage Loan Process


• Shopping for a Home with a Real Estate Agent


• Making an Offer on a Home


• Getting Ready to Close on Your Loan


• Welcome to Homeownership

 

In addition to the modules, Homeview also provides access to tools such as checklists and calculators, as well as a link to find HUD-approved local housing counselors for consumers who would like additional support. At the time of launch, HomeView content is available in English, with additional language options to be added in the future.

“Having a reliable, single source of information in common, everyday language can make the difference for aspiring homeowners, no matter where they are on their housing journey. That’s why we’re so proud to launch HomeView,” McCarthy said. “As a leader in US housing and mortgage finance for more than 80 years, Fannie Mae is able to provide intuitive, credible, on-demand learning to enable all consumers to become more engaged and informed homeowners. We are investing in a full-lifecycle education portal that will continue to be updated and tested, offering additional resources and support.”

The Most-Read Home Design Stories of 2021

Just how important is the bathtub for resale? From home cosmetic enhancements to spotting serious foundation defects, find what’s creating all the buzz in home design over the past year. The following are the most-read articles in home design at REALTOR® Magazine.

Guide to Residential Styles

Can you tell a Cape Cod from a bungalow? Check out REALTOR® Magazine’s breakdown of common house styles. Learn to highlight the details that give a home character, history, and romance.

Just How Important Is a Bathtub for Resale?

It’s long been believed that every home needs at least one bathtub to attract the widest group of buyers. But with increased interest in big, well-equipped, walk-in showers, does a tub really matter that much?

A Myriad of Home Trends to Gain Momentum in 2021

As homeowners continue to stay in, avoiding the latest spikes in coronavirus infection numbers, many seek new ways to improve their abode’s function, aesthetics, and sense of fun.

7 Fixes to Avoid Major Foundation Problems

Water can damage a foundation in countless ways, so homeowners should look to experts for the dos and don’ts.

9 Decor Trends That Are In and Out

Find out what attracted buyers’ eyes in 2021, and what looks have grown outdated.

 

Source: REALTOR® Magazine