A report from Fannie Mae this morning showed that the rate of serious delinquencies of single family homes (behind at least 90 days on the mortgage) fell to 5.47 percent in March, down from 5.59 percent in February. One year prior, the rate of serious delinquencies was 3.15 percent.
This is the first decline in serious delinquencies in nearly 4 years. Although the overall foreclosure rate is up, fewer houses are entering into the foreclosure process. This probably indicates that Fannie Mae and other lenders are actually processing more foreclosures than any fundamental shift in the housing market. This is probably a good thing, though, as it will allow the housing market to finally bottom out and hopefully stage a comeback.
In other housing news, The Pending Home Sales Index from the National Association of Realtors came out this morning, and as expected we saw another spike in pending home sales in April. Pending home sales increased 6.0 percent in April, and were 22.4 percent higher than April 2009.
These increases can be attributed to the first time home buyer and repeat home buyer tax credits, which expired at the end of April. In order to claim these credits, buyers needed to have a contract in place by April 30, and close on a home prior to July 1st. As we discussed this morning, applications for purchase mortgages declined precipitously after the expiration of the credit. Soon enough we will see home sales decline, assuming all other factors remain the same.
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