Investors have been feasting on lower priced foreclosures, and spending a lot of cash to acquire them. Cash deals accounted for 35% of all home sales in March. While the number of sales of homes in the $100,000 to $500,000 price range was down more than 14% in March, the number of sales under $100,000 was up by around 10%. So, it’s clear that investors are taking homes off the market. However, the news is still indicating that many more foreclosures are in the wings.
It looks like there are currently around 4.3 million homeowners delinquent at least 90 days or more, a significant number, considering there have been around 6.5 million foreclosures since the market peaked in 2006. There is a little good news in the mix, as the number of people in the early stages of delinquency, under 90 days late, is down from 2.7 million to around 1.9 million.
Currently, more than 11 million, or around 23% of homeowners are under water in their mortgages, owing more than the home is worth. A number of around $750 billion is what CoreLogic states the homeowners owe their lenders in excess of the current value of their homes.
Homebuilder sentiment is down, and builders are sitting on the sidelines. First time home buyers aren’t in the market in any great numbers, and they are the ones who drove a large portion of the new home market. One estimate is that the numbers for new home construction will remain depressed for at least another four years.
When it comes to overall home prices, what matters most is not the number of foreclosures, but the share of the whole market filled by foreclosure sales. The share of distressed sales shrank from 40% to 37% in April. If this number continues to shrink, prices should begin to stabilize and even rise in some areas.
Investors have been feasting on lower priced foreclosures, and spending a lot of cash to acquire them. Cash deals accounted for 35% of all home sales in March. While the number of sales of homes in the $100,000 to $500,000 price range was down more than 14% in March, the number of sales under $100,000 was up by around 10%. So, it’s clear that investors are taking homes off the market. However, the news is still indicating that many more foreclosures are in the wings.
It looks like there are currently around 4.3 million homeowners delinquent at least 90 days or more, a significant number, considering there have been around 6.5 million foreclosures since the market peaked in 2006. There is a little good news in the mix, as the number of people in the early stages of delinquency, under 90 days late, is down from 2.7 million to around 1.9 million.
Currently, more than 11 million, or around 23% of homeowners are under water in their mortgages, owing more than the home is worth. A number of around $750 billion is what CoreLogic states the homeowners owe their lenders in excess of the current value of their homes.
Homebuilder sentiment is down, and builders are sitting on the sidelines. First time home buyers aren’t in the market in any great numbers, and they are the ones who drove a large portion of the new home market. One estimate is that the numbers for new home construction will remain depressed for at least another four years.
When it comes to overall home prices, what matters most is not the number of foreclosures, but the share of the whole market filled by foreclosure sales. The share of distressed sales shrank from 40% to 37% in April. If this number continues to shrink, prices should begin to stabilize and even rise in some areas.