Mortgage Delinquencies, Foreclosures Drop in 2Q; Seniors Home Building Confidence Rises; Employment Claims Edge Up

The mortgage delinquency rate dropped 29 basis points from the previous quarter, and 62 basis points from one year ago. Builder confidence in the 55+ housing market for single-family homes showed strong improvement in the second quarter of 2013 compared to the same period a year ago. And initial unemployment claims increased by 5,000 from the previous week.

The Mortgage Bankers Association reported on Thursday that the delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to 6.96 percent of all loans outstanding at the end of the second quarter of 2013, the lowest level since mid-2008. The delinquency rate dropped 29 basis points from the previous quarter, and 62 basis points from one year ago, according to the organization’s National Delinquency Survey.

The MBA delinquency rate includes loans that are at least one payment past due but doesn’t include loans in the process of foreclosure. The percentage of loans on which foreclosure actions were started during the second quarter of 2013 decreased to 0.64 percent from 0.7 percent, reaching the lowest level since the first quarter of 2007. The percentage of loans in foreclosure at the end of the second quarter was 3.33 percent, down 22 basis points from the first quarter and 94 basis points lower than a year ago.

Some of the highest foreclosure numbers are in New York, New Jersey and Connecticut, the MBA reported. The rate of new foreclosures in New York hit an all-time high during the second quarter and is now essentially equal with Florida. The percentage of loans in foreclosure in New Jersey remains about the same as the rates in California, Arizona and Nevada combined. The foreclosure percentages in Connecticut are back to near all-time highs for that state.

 

Seniors Home Building Feeling Fine

Builder confidence in the 55+ housing market for single-family homes showed strong improvement in the second quarter of 2013 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 increased 24 points to a level of 53, which is the highest second-quarter number since the inception of the index in 2008. All of the components of the 55+ single-family index showed major growth from a year ago: present sales climbed 24 points to 54, expected sales for the next six months increased 25 points to 60, and traffic of prospective buyers rose 26 points to 48.

The 55+ multifamily rental indices likewise showed strong gains in the second quarter, according to NAHB. Present production increased 19 points to 50, expected future production rose 20 points to 52, current demand for existing units climbed 20 points to 62, and future demand increased 21 points to 63.

“The 55+ [index] for single-family homes almost doubled from a year ago,” NAHB chief economist David Crowe said in a statement. “Sentiment in other segments of the 55+ market housing was strong as well. At this point, the main challenge for builders in many parts of the country is finding enough buildable lots in desirable locations and workers with the necessary skill set to respond to the increased demand.”

Employment Claims Edge Up

The U.S. Department of Labor reported on Thursday that for the week ending August 3, initial unemployment claims were 333,000, an increase of 5,000 from the previous week, which was a post-recession low for this particular metric. The less jumpy four-week moving average was 335,500, a decrease of 6,250 from the previous week, and the lowest four-week average since 2007.

 

Wall Street bounced up moderately on Thursday, following some moderate down days earlier in the week, with the Dow Jones Industrial Average gaining 27.65 points, or 0.18 percent. The S&P 500 and the Nasdaq were up 0.39 percent and 0.41 percent, respectively.