In the second quarter of 2010, a surge of foreclosures smashed homeownership levels, pushing the home ownership rate across the United States down to 66.9 percent, which is the lowest in over a decade, according to the U.S. Census Bureau[1]. Some experts attribute the foreclosure surge to the acceleration of the foreclosure process by lenders, with 269,962 homes being seized as REO property just in the second quarter of 2010.
While many lenders and market analysts refer to their backlog of foreclosures and a “shadow market” that is yet to appear since lenders are postponing the actual repossession process, these numbers seem to indicate that we can expect to see fewer foreclosure delays in the coming months.
At its highest, the home ownership rate was 69.2 percent. This occurred in 2004. Since that time, it has bounced around, declining for three straight quarters in the past 9 months. As more homes are foreclosed on and more buyers postpone buying a home or find themselves unable to finance the homes they want, vacancies can be expected to rise. Home prices are set to follow, although the median home price in the U.S. has been on the rise since its nadir in February of $164,600.
It seems to me that this is something that has to happen in order for the market to correct itself and create a growth that can then be maintained. Do you agree, or do you think lenders need to do more in terms of forbearance and extension of the foreclosure process?
Thank you for reading! Your comments and questions are welcomed below.
[1] http://www.bloomberg.com/news/2010-07-27/vacancies-climb-as-u-s-home-ownership-falls-to-lowest-level-in-a-decade.html
Absolutely… they must do more. Unless and until the lenders begin to look at the market realisticly, and more importnt the BPO agents begin to price the properties for a declining market we’ll continue to see the foreclosure numbers go up. Phoenix saw a 33% jump in the June July timeframe. That doesn’t even begin to show the 10-15% drop in pricing that’s been/is going to happen. Bottom line is they need to shorten the short sale negotiation time frame, allow agents to update BPO pricing, and most importantly stop the hardball tactics of demanding payment of this or that to close the sale. This is becoming a bigger nightmare than even the last couple of years.
I’m beginning to think the lenders/investors are not reading the very depressing numbers coming out from NAR and other tracking firms. Just when you thought HAFA would streamline the process… it’s simply creating more hoops to jump through. My Seller’s are rejecting the extra 4-8 weeks of time it takes to get a HAFA deal to close. For that, they’ll get monthly numbers that reflect their ignorance.