June Housing Scorecard Finds Housing Market Still "Fragile"

The U.S. Department of Urban Housing and Development recently released the June Housing Scorecard, which showed an increase in house prices, and a drop in foreclosures, but a continued strain from current foreclosures and distressed properties.

According to the scorecard, only 4.3 percent of prime mortgages were 30 days late or more at the start of June, down from 6.69 percent in 2010, and subprime mortgages dropped to 32.5 percent from 36.4 percent last year. The recovery efforts have helped nearly 5 million homeowners modify their mortgages from April 2009 to April 2011.

The Home Affordable Modification Program has helped 730,000 permanent modifications to date, and 32,000 homeowners received permanent modification through the program in May 2011 alone. There are still more than 2.6 million delinquent loans that are eligible for HAMP across the country. Also reported, the national median mortgage reduction was 37 percent, and the modifications through HAMP have reduced the mortgage burden by more than $6.8 billion.

According to the National Center for Policy Analysis, the housing market might still continue to fall. The director of economic research at the Reason Foundation, Anthony Randazzo, predicts that pending home sales numbers will continue to fall, and existing home sales will decrease 3.8 percent.

Randazzo also told the NCPA that certain elements of the housing market need to be addressed: 1) housing prices must fall further before a recovery sets in; 2) a glut of houses in shadow inventory must be sold before home construction can recover; 3) bank regulators and state attorneys general must find common ground on mortgage services so investors can return and help revive the market.  

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