Mortgage Delinquencies, Over-55 Building Up; Unemployment Down
- Aug 10, 2012
U.S. mortgage delinquencies edged up a bit in the second quarter, according to the Mortgage Bankers Association on Thursday. The organization’s National Delinquency Survey noted that the delinquency rate for mortgage loans on one-to-four-unit residential properties was up to 7.58 percent of all loans outstanding as of the end of the second quarter, an increase of 18 basis points from the first quarter but a decrease of 86 basis points from the same period a year ago.
By the MBA’s reckoning, the delinquency rate includes mortgages that are at least one payment past due but doesn’t include those already in the process of foreclosure. The percentage of loans on which foreclosure actions were started during the second quarter was 0.96 percent, unchanged from last quarter and from the same quarter a year ago. The percentage of loans in the foreclosure process at the end of the second quarter was 4.27 percent, down 12 basis points from the first quarter and 16 basis points lower than one year ago.
“Perhaps more important than the small size of the increase is the fact that it reversed the trend of fairly steady drops in delinquencies we have seen over the last year,” said MBA chief economist Jay Brinkmann in a statement. “This is consistent with the slowdown in the economy during the first half of the year and our stubbornly high unemployment rate.”
Builder Confidence in 55+ Housing Market Up
Builder confidence in the 55-and-over housing market for single-family homes showed improvement in the second quarter of 2012 compared to the same period a year ago, according to the National Association of Home Builders’ latest 55+ Housing Market Index, which was released on Thursday. The index more than doubled year-over-year from a level of 13 to 29, which is the highest second-quarter reading since the NAHB introduced the index in 2008.
The 55+ index, though new, might be especially important to the residential real estate industry going forward, since that demographic is only going to increase in size for the next few decades. Whether the age group will be able to sell their houses is now a critical question for the industry, and the answer isn’t clear yet. But any improvement in sentiment might reflect some unlocking of pent-up demand from 55+ consumers who either still want to trade up or who are downsizing.
As with the standard NAHB builder’s index, a reading below 50 indicates that more builders view conditions as poor than good. Although all index components remain below 50, they’ve increased considerably from a year ago: present sales more than doubled (from 12 to 30), while expected sales for the next six months increased 17 points to 35, and traffic of prospective buyers rose nine points to 22.
Initial Unemployment Claims Edge Down
The U.S. Department of Labor reported on Thursday that for the week ending Aug. 4, initial unemployment claims totaled 361,000, a decrease of 6,000 from the previous week’s revised figure of 367,000. The less volatile four-week moving average was 368,250, an increase of 2,250 from the previous week’s revised average of 366,000, though that figure is still among the lowest so far this year for the four-week average.
Wall Street gyrated a lot on Thursday, perhaps anticipating poor export growth numbers out of the China (as indeed was the case–the gains were practically nil in July). In the end, however, the equities markets were roughly at their starting points. The Dow Jones Industrial Average lost 10.45 points, 0.08 percent, while the S&P 500 was 0.04 percent up and the Nasdaq advanced 0.25 percent.