The Latest Trends In The Housing Market

The Latest Trends In The Housing Market

Corelogic came out with their October Housing and Mortgage Trends report a little while ago and there are several interesting insights which I will summarize here. Unfortunately, they are pretty clear that they don't want any part of their report reproduced so I won't be displaying any of their graphs but you can click on that link above to see them for yourself.

  • Home ownership rates have declined substantially for younger people from 1980 to 2010. See figure 3. In the 25 - 34 age group the home ownership rate has declined from 51.6% to 42% and for 35 - 44 year olds it has declined from 71.2% to 62.3%. Home ownership rates have actually increased for people above 54.
  • There is a rather disturbing trend that people are spending much more on housing than they did 25 years ago. See figure 4. Since 1985 homeowners have increased the % of their total expenditures allocated to housing from 21.2% to 33.2% while renters have increased their housing % from 16.4% to 38.4%.
  • Note that renters now spend quite a bit more (on a relative basis) on housing than homeowners do. If I were the NAR I would probably claim that this shows that it's cheaper to own than rent but that would be a stupid conclusion. You can't really be sure what this means. It probably means that a landlord is more willing to let you extend yourself than a mortgage lender.
  • Most foreclosed properties that are taken over by the banks sell pretty quickly but almost 10% of those foreclosed in 2006 remain bank owned as of the second quarter of 2010. In all likelihood these properties are really scary.
  • Bank owned properties have recently taken longer to sell. During 2006 and 2007 20% of foreclosed properties were sold by the lenders within 3 months. That percentage increased to 46% during the second quarter of 2009 but by the second quarter of 2010 the percentage declined to 36%.
  • More and more of the bank owned properties are being bought with cash. The percentage has risen from 40% in early 2006 to 56% by the second quarter of 2010.
  • When you look at CoreLogic's mortgage performance charts on page 5 of the report you see that delinquencies and foreclosure filings are trending down over the last 2 years - much more so than you would imagine from what you read about in other sources.

 

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    After 20 years in the corporate world and running an Internet company, Gary started Lucid Realty with his partner, Sari. The company provides full service, while discounting commissions for sellers and giving buyers rebates.

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