CoreLogic published their U.S. Housing and Mortgage Trends report this earlier in the week. In contains a wealth of interesting information. The main conclusions of the report are that the housing market and consumer spending will continue to be constrained, that shadow inventory is declining and will put less downward pressure on home prices moving forward, and that negative equity will continue to be a problem for quite a while. From the report:
“Fundamentally, the recent slower economic growth illustrates that as the housing market goes, so does the economy…the housing market is really a proxy for how confident consumers are in their finances and their longer-term outlook.”
A number of observations from the report:
- 66% of households own homes, but homeowners account for 75% of all consumer expenditures.
- If there is a rebound in retail sales, CoreLogic predicts it will be driven by a relatively small number of high income households.
- Home prices are stabilizing somewhat if you exclude distressed sales. Over the past year, home prices have dropped 0.4% when excluded distressed sales, compared to a 7.4% decline when you include distressed sales.
- Residential shadow inventory was down to 1.7 million units, a .2 million unit drop year-over-year.
- Total home equity has declined from $13.5 trillion in 2006 to $6.1 trillion currently.
- Eleven million homes with properties are underwater, accounting for 23% of all properties with mortgages.
- Furthermore, 2.4 million borrowers have less than 5% home equity.
- The average amount of negative equity is $65,000.
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