House prices are still falling in the U.S. And foreclosure rates are increasing. Those buying for a home should find this good news. However, those looking to sell a home might want to give it some more time.
FHFA report shows distinct drop
The home-price index fell faster than it has since 2008 in the first quarter according to the Federal Housing Finance Agency. Prices have fallen 2.5 percent in the last quarter, which is a drop of 5.5 percent from last year. The report, however, covers only homes purchased with mortgages provided by Fannie Mae or Freddie Mac. It doesn’t record cash only sales. They are out entirely.
Several think it is from the foreclosures
FHFA acting director Edward DeMarco said, “In many local real estate markets, particularly those hit hard by this cycle, foreclosures and other distressed properties are still a key factor in recorded and anticipated future sales and may be delaying price stability or recovery.” RealtyTrac states that foreclosure home prices are dropping. There was a 1.89 percent drop from the last quarter to an average sale price of $168,321. That is a 1.46 percent drop in price from this time last year. And because foreclosures lower the value of other homes in their neighborhood, they affect the rest of the index as well.
Foreclosure third parties
”While foreclosure sales continue to account for an unusually high percentage of all residential home sales, sales volume is well off the peak we saw in the first quarter of 2009, when nearly 350,000 foreclosure properties were sold to third parties,” said CEO of RealtyTrac, James Saccacio. During the first quarter, 158,434 homes in various stages of foreclosure were sold to third parties during the first quarter, which is a go down of 16 percent from the previous quarter and 36 percent from a year ago.
Foreclosures in states are different from one another
Foreclosure rates depend on the state. Some have more while others have less. It was at 41 percent in both Ohio and Illinois. California and Arizona had foreclosure rates of 45 percent. In Nevada, foreclosures were 53 percent of the market.
Frauds with foreclosure common
There have been more foreclosure scams recently. Homeowners end up with nothing in these scams that have upfront fees for foreclosure prevention. Mortgage reduction plan negotiations can’t have upfront fees anymore with a requirement made in Feb. with the Federal Trade Commission.
Citations
Wall Street Journal
blogs.wsj.com/marketbeat/2011/05/25/home-prices-fall-at-fastest-pace-since-late-2008/?mod=google_news_blog
DS News
dsnews.com/articles/home-prices-post-biggest-drop-in-two-years-as-foreclosures-depress-market-2011-05-26
DS News
dsnews.com/articles/home-prices-post-biggest-drop-in-two-years-as-foreclosures-depress-market-2011-05-26
Daily Finance
dailyfinance.com/2011/05/27/foreclosure-prices-fall-again-how-your-state-stacks-up/
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