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The Office of Economic Policy

HOUSING DASHBOARD
April 19, 2016
Since last summer, housing starts overall have moved sideways on net, as further increases in
single-family starts have about offset a moderation in multifamily starts. However, the flatness
in housing starts has yet to show through to residential investment because of the lags
associated with housing construction. Residential investment rose at an annual rate of
10 percent in 2015Q4, contributing 0.3 percentage point to GDP growth, and available
indicators suggest that residential investment saw another track for another sizable gain in
2016Q1. Meanwhile, residential construction employment has continued to rise steadily.
Home price appreciation has moderated—from a double-digit pace in late 2013 and early 2014
to a more sustainable mid-single-digit pace now. This moderation occurs as high home values,
in some areas, challenge affordability for potential homebuyers. However, access to credit
continues to slowly expand to reach borrowers with lower credit quality. In addition, home
price valuations look to be somewhat elevated relative to pre-bubble norms.
Although some mortgage borrowers continue to struggle in the wake of the crisis, delinquency
and foreclosure rates are closing in on their pre-crisis ranges. The number of distressed sales
also continues to drop.
This month’s dashboard includes a special topic that explores the degree to which the rebound
in home prices since the Great Recession has supported consumer spending and how this
“housing wealth effect” depends on the availability of credit and other factors.

Housing Market Flash

April 2016

Housing Market Flash
Tuesday, April 19, 2016

Pre-bubble
norm
(2000-2002
Current
average) Trough
level
Single-family homes
New

921

Sales
Existing

(thousands)

Inventory of homes
available for sale
(thousands)

New
Existing

4,779
311
1,836

Housing starts

1,289

Building permits

1,257

CoreLogic HPI

115.7

Construction activity
(thousands)

270
Feb-11
3,060
Jul-10
142
Jul-12
1,550
Dec-15
353
Mar-09
337
Jan-09

512
Feb-16
4,510
Feb-16
240
Feb-16
1,650
Feb-16
764
Mar-16
727
Mar-16

(index, Jan 2000 = 100)

Inflation-Adjusted

Housing affordability

127

188.4

101.9

138.1

9.1%
6.8%
19
thousands

-41
thousands

14.5%
9.3%
5.3%

Improved
Improved
Weakened
Improved
Improved

-44.4%
-5.6%
-71
thousands

-186
thousands

-40.7%
-42.2%

Feb-16

6.3%

101.1

174.9

Jul-06

(NAR, index=100 when median family income qualifies
for 80% LTV mortgage on a median priced home)

Improved

Feb-16

Nov-11

111.6

CoreLogic HPI

137.3
Nov-11

Prices

Current 12-month
average versus yearearlier value

Current level
versus prebubble norm
(2000-2002
average)

Feb-16

8
Jan-09

58
Apr-16

point(s)

117
Oct-08

153
Apr-16

point(s)

Improved
Improved

-2.3%

62.8%
23.8%
38.2%

Weakened

Sentiment
59

Homebuilder
(NAHB, over 50 means majority view conditions
positively)

Home-buying conditions

152

(Reuters/Umich, index = good time - bad time + 100)

6

-1
Improved

point(s)

Weakened

point(s)

Improved

thousands

-1

1

Demographics
Household formation

1113

(thousands)

Homeownership rate
(percent)

67.7

100
461
2008-Q4 2015-Q4

290
thousands

-653

63.5
63.7
-0.8
-4
2015-Q2 2015-Q4 percentage point(s) Weakened percentage point(s)

1

Special Topic: The Great Recession and the Housing Wealth Effect April 2016
House Prices
CoreLogic Index with Distressed Sales (Jan. 2000=100)

Home prices have steadily recovered and
are approaching the pre-recession peak.
Home prices dropped more than 30 percent
peak-to-trough during the housing bust.
Since reaching the trough in late 2011, home
prices have regained roughly 80 percent of the
losses incurred during the downturn.

220
Apr-2006, 198.5

200

Jan-2016, 187.2

180

160
140
Nov-2011, 137.3

120
100

80
'00

'02

'04

'06

'08

'10

'12

'14

'16

Source: CoreLogic

Rising home prices have restored a
substantial amount of the housing wealth
lost during the Great Recession. The slow
but steady rise in home prices has helped
households regain $6.1 trillion worth (nearly
90 percent) of the real estate equity lost during
the recession. The value of household real
estate reached $22 trillion in 2015Q4 up from a
low of $16 trillion in 2011Q4.

Trillions

Household Real Estate and Net Equity

25

Percent

Market Value of Real Estate (left scale)
Net Equity (left scale)
Equity's Share of Value (right scale)

20

65

15

55

10

45

5

35

0

25
'00

Studies have found that increases in home
equity generally lead to increases in
consumption. The magnitude of this effect has
fluctuated over time. In the early 2000s,
households spent an estimated $4 to $5 for
every $100 increase in a home’s value. More
recent studies suggest that the since the Great
Recession, the size of this “housing wealth
effect” has fallen to roughly $2.1 These
estimates imply that the increase in home values
since 2012 has supported an additional $117
billion in consumption.

75

'03

'06

'09

'12

'15

Source: Federal Reserve Board

Consumption Gains due to Rising Home Values
Billions
20

18
$117.3 Billion

16
14
12
10
8
6
4

2
0
'12

'13

'14

'15

Source: Treasury Calculations based on Federal Reserve Board data

Case, Karl E., John M. Quigley and Robert J. Shiller, “Wealth Effects Revisited 1975-2012” (Cowles Foundation Discussion Paper
No. 1884, Yale University, 2013). The authors also suggest that there is a negative wealth effect for declining home prices. They
estimate that for every $100 drop in a home’s price, consumption is reduced by $6.
1

2

Special Topic: The Great Recession and the Housing Wealth Effect April 2016

One explanation for the smaller housing
wealth effect in recent years is that
homeowners are less able or willing to
extract equity from their homes to finance
increases in consumption. In 2012Q2, the
share of homeowners extracting cash when
refinancing their mortgages dropped to an alltime low, thanks to low levels of equity, tight
credit availability, and credit scores that were
damaged during the Great Recession. Since
then, the share of “cash-out” refinances has
trended up to pre-bubble levels but,
anecdotally, lenders report that households are
taking less cash out than before.

Proportion of Cash-out Dollars from
Mortgage Refinance Originations
Percent

35
30
25
20
15

10
5
0
'98

'00

'02

'04

'06

'08

'10

'12

'14

Source: Freddie Mac

Home Equity Line of Credit Balance and
Home Values

Other types home equity borrowing have
also declined. Notably, the volume of lending
through home equity lines of credit has
trended down, on balance, since 2009, even as
home prices have rebounded in recent years.
Tight credit standards are one reason why
households have borrowed less against home
equity.

Billions

Index (2000 Q1= 100)

$1,000

200

$900

190

$800

180

$700

170

$600

160

$500

150

$400

140

$300

130

$200

120

Home Equity Line of Credit Volume, left scale

$100

110

CoreLogic with Distressed Home Price Index, right scale

$0

100
'00

'02

'04

'06

'08

'10

'12

'14

Source: Federal Reserve Bank of New York, CoreLogic

Households’ response to housing wealth
gains may also be muted because of a more
general desire to strengthen their balance
sheets. Since peaking in 2007, the ratio of
household debt to income has fallen, on
balance, partly because new borrowing for
mortgages and housing-related debt has been
muted. Also, households have voluntarily paid
down debt and involuntarily extinguished debt
through foreclosures and non-mortgage loan
defaults.

Household Debt to Income Ratio
Percent
140

130

120

110

100

90
'00

'03

'06

Source: Financial Accounts of the United States

3

'09

'12

'15

Housing’s Importance to the Economy
Residential investment continues to
support GDP growth. Residential
investment rose at an annual rate of
10 percent in 2015Q4, adding

Percent

10.0

April 2016

Residential Investment's Contribution to
Real GDP

8.0
6.0

0.3 percentage point to real GDP growth,

4.0

matching the average contribution over the

2.0

previous four quarters. Data through March

0.0

suggest that residential investment is on
track for another sizable gain in 2016Q1.
(The recent flatness in housing starts will
take some time to be reflected in residential

-2.0
-4.0
-6.0

GDP (% Change, Annual Rate)
Residential Investment's Contribution

-8.0
-10.0
'00

investment because of the lags associated

'02

'04

'06

'08

'10

'12

'14

Source: Bureau of Economic Analysis

with construction.)
Employment in residential construction
continues to recover. Over the past year,

Employment in Residential Construction

Millions

Percent

4.0

4.0

Number Employed (left scale)

it has increased by 13,800 jobs per month,
compared with 12,100 jobs per month in
the year-earlier period. The level of
employment remains relatively low:
residential construction employment
totaled just under 2.6 million workers in
2016Q1, accounting for roughly 2.1
percent of total private payroll

Share of Total Private Employment (right scale)

3.5

3.5

3.0

3.0

2.5

2.5

2.0

2.0

1.5

1.5

2.6 percent in the early 2000s.

'02
'04
'06
'08
'10
'12
'14
'16
Note: Includes those employed directly in residential construction as well as related
specialty trades.
Source: Bureau of Labor Statistics

Housing wealth is nearing its earlier

Trillions

employment, compared with around

peak. The value of household real estate
reached $22.0 trillion in 2015Q4, up from a
low of $16.2 trillion in 2011Q4. The current
level is close to its 2006Q4 peak, but the

Household Real Estate and Net Equity

25

Percent

Market Value of Real Estate (left scale)
Net Equity (left scale)
Equity's Share of Value (right scale)

75

20

65

15

55

10

45

5

35

sustainable level is higher than in 2006
because of population-driven growth in the
housing stock and overall inflation.

0

25
'00

'02

'04

Source: Federal Reserve Board

4

'06

'08

'12

'14

'16

Housing Starts and Inventories

April 2016

Since last summer, housing starts have

Starts and Permits

Millions

been about flat, as further increases in

2.0

single-family starts have about offset a

Single-Family Starts

1.8

pullback in multifamily starts. Single-

Single-Family Permits
Multifamily Starts

1.5

family starts (light blue line) fell sharply in
March, but, smoothing through the monthly
volatility, appear to remain on a gradual

1.0

uptrend. Multifamily starts (black line)

0.8

surged in the first half of 2015 but have

0.5

since moderated.

Multifamily Permits

1.3

0.3
0.0
'00

'02

'04

Source: U.S. Census Bureau

Builder confidence remained generally

40

components—sales expectations over the

30

next six months, current sales, and buyer

20

traffic—are above their 2014 averages.

'16

50

last 22 months. All three of the index’s

'14

60

builders view the market positively) for the

'12

70

readings above 50 (meaning a majority of

'10

80

of Homebuilders index has recorded

'08

Builder Confidence

Index

upbeat in April. The National Association

'06

10
0

'00

'02

'04

'06

'08

'10

'12

'14

'16

Source: National Association of Homebuilders

The inventory of homes for sale remains
of existing homes for sale (dark blue line)
was at 1.88 million units at the end of

Millions

well below historical averages. The stock

Unsold Homes

Millions

Thousands

4.5

700
Existing (left scale)

4.0

February, up from 1.76 million in December,

3.5

which was the lowest level since December

3.0

1999. The stock of new homes for sale

2.5

600

(light blue line) was at 240,000. At the
current sales pace, there is 4.4-month

500

Series average

300

Series average

2.0

200

New (right scale)

supply of existing homes available for sale;

1.5

for new homes, the available inventory is

1.0

equivalent to a 5.6-month supply.

400

100
0
'02

'04

'06

'08

'10

'12

Source: National Association of Realtors and U.S. Census Bureau

5

'14

'16

Underpinnings of Housing Demand
Mortgage interest rates remain very low
by historical standards. The average
interest rate on new 30-year fixed-rate
conventional mortgages settled at a threeyear low of 3.58 percent in the week ending

April 2016

Interest Rate of 30 Year Fixed-Rate Mortgages

Percent
9
8
7

April 14. The current rate is only 27 basis
points higher than the lowest rate recorded
in 2012.

6
5
4
3

'00

'02

'04

'06

'08

'10

'12

'14

'16

Source: Freddie Mac

The National Association of Realtors
Housing Affordability Index suggests
that housing remains affordable for the

240

typical family. Affordability has

220

diminished considerably since 2013 as

200

home prices have risen, but has crept up

180

recently due to relatively low mortgage

160

rates. (Note that the index assumes a 20

140

percent down payment; interest rates would

120

be higher and affordability would be lower

Home Affordability

Index

100

for a family that made a smaller down

Record Affordability
Index = 214.5

Historic Average
(data since 1971)

80
'00

payment).

'02

'04

'06

'08

'10

'12

'14

'16

Source: National Association of Realtors

Attitudes Towards Buying
Households remain positive about home

Index (Good minus Bad plus 100)

buying conditions. The University of

180

Michigan Consumer Survey’s “Good Time to

170

Buy” Index remained slightly higher than the

160

long-term average in mid-April. Low

150

interest rates continue to be the main factor

140

cited when respondents were asked why

130

home-buying conditions are good.

120

Long-Run Average
(data since 1986)

110

100
'00

'02

'04

'06

'08

Source: University of Michigan Consumer Survey

6

'10

'12

'14

'16

Underpinnings of Housing Demand
Senior loan officers at banks report

FRB Senior Loan Officer Opinion Survey
on Mortgage Lending

easing mortgage lending standards in
recent quarters. The last seven quarters

100

mark the first period of sustained easing

Net Percent of Banks Reporting
Tightening Standards

80

since the period of dramatic tightening

April 2016

60

during the financial crisis. (Note that the
level of the line shown corresponds to the

40

change in lending standards, with values

20

below 0 representing an easing of lending
standards and values above 0 representing a
tightening).

Tightening

0
-20

Easing

-40

90

Despite the easing, lending is still
restrained, and riskier borrowers continue
to have very limited access to mortgage
credit. Mortgage originations have risen, on
net, over the past year, but the pick-up has
been driven largely by borrowers with credit
scores above 780. Originations by
borrowers with credits scores below 780 are
well below pre-crisis levels. Almost no

98

02

08

10

14

Mortgage Originations by Credit Score

Billions of dollars

<620

1,000

620-659

660-719

720-779

780+

800
600
400
200

mortgages are being extended to borrower
with FICO scores below 660.

94

0
'03

'04

'05

'06

'07

'08

'09

Source: FRBNY Consumer Credit Panel/Equifax
Note: Credit Score is Equifax Riskscore 3.0;

'10

'11

'12

'13

'14

'15

Credit Score at Mortgage Origination
The median FICO score of newly originated
mortgages has fallen slightly in recent quarters
to around 750, but it is still up from roughly
700 in the early 2000s. At the 10th
percentile, the FICO score for new mortgages
was down to 642 by the end of 2015,
compared with less than 600 in the early
2000s.

800

Score

750

median

700
25th percentile
650
10th percentile
600
550

500
'00

'02

'04

'06

'08

'10

'12

Source: FRBNY Consumer Credit Panel/Equifax
Note: Credit Score is Equifax Riskscore 3.0; mortgages include first-liens only.

7

'14

Household Formation
Household formation fell sharply in
2015Q4. In the year ending in December,
just 191,000 households were formed. The

April 2016
Household Formation

Millions
3.0
2.5

explanation for the decline is unclear.
Between mid-2006 and 2014Q3, the rate of

1.5

household formation averaged roughly half

Historic Average
(data since 1956)

2.0

1.0

its historical average of 1.2 million per year.
Household formation surged at the end of
2014 and remained above its historical
average through 2015Q3.

0.5
0.0
-0.5
'00

'02

'04

'06

'08

'10

'12

'14

'16

Source: U.S. Census Bureau, Treasury calculation

The proportion of young adults who are
working has seen a partial recovery. The
employment-to-population ratio for
individuals ages 25-34 has reversed more
than half of the decline that occurred

Employment-to-Population Ratio
Ages 25-34

Percent
84
82
80
78

during the recession. The strengthening

76

labor market should support household

74

formation going forward.

72
70
'00

'02

'04

'06

'08

'10

'12

'14

'16

Source: Bureau of Labor Statistics

Growth in Rents vs. Overall Inflation
Year-over-year percent change

Higher rents are an obstacle to young
adults establishing their own households.
The supply of rental housing appears to
have not risen as fast as demand and, as a
result, rents have been increasing rapidly.
They outpaced overall inflation by
2.8 percentage points over the year ending
in March.

7.5

5.0

CPI-U: Rent of
Primary Residence

2.5

0.0
CPI-U: All Items
-2.5
'00
Source: BLS

8

'02

'04

'06

'08

'10

'12

'14

'16

Homeownership

April 2016

The homeownership rate edged up in
2015Q4. The homeownership rate was
63.7 percent in 2015Q4, up from a low of
63.5 percent in 2015Q2. The

Homeownership Rate
Percent
70
68

homeownership rate may stagnate in
coming quarters as household formation
continues to recover because newly formed
households are more likely to rent before
purchasing a home.

66
64
62

60
'80

'85

'90

'95

'00

'05

'10

'15

Source: U.S. Census Bureau

First-time home buyers account for

Percent

Share of Mortgages Accounted by
First-time Buyers

55.0

around half of purchase mortgage
originations. The share of newly originated

53.0

mortgages going to first-time buyers was
52.1 percent in March, higher than the 51.4

51.0

percent recorded a year ago.
49.0

47.0

'13

'14

'15

'16

Source: American Enterprise Institute

Primary Reasons for Renting among
Young Renters who Prefer to Own

87 percent of households headed by
young adults that are renting say that
they would prefer to own if they could
afford it. Of those households, the most

Cannot qualify
for a mortgage

35

commonly cited reasons for not owning are
lack of downpayment (59 percent) and not
being able to qualify for a mortgage to buy

Cannot afford
downpayment

59

a home (35 percent).
0

10

20

30
40
Percent

50

60

70

Source: Report on Economic Well-Being of U.S. Households in 2014, Federal Reserve Board

9

Home Sales
New single-family home sales remain on

April 2016
New-Single Family Home Sales

Thousands

a very gradual uptrend. At an annual rate

1600

of 512,000 in February, they were

1400

1.8 percent higher than their average level

1200

in 2015. New single-family home sales
averaged 503,000 units for all of 2015, the
best annual performance since 2007. Still,
the current pace of sales is only about half
the level seen prior to the boom in the early
2000s.

1000
800
600
400
200
0

'02

'04

'06

'08

'10

'12

'14

'16

Source: U.S. Census Bureau

Sales of existing single-family homes
have been volatile in recent months.
Existing single-family home sales fell
sharply in February. Severe weather in the
Northeast and Midwest may have held

Millions

Existing Single-Family Home Sales

7

6

5

down the number of contract signings that
month. They also showed sharp swings last
fall because of new mortgage disclosure
regulations that reportedly delayed
contract signings by a few days.

4

3

2

'00

'02

'04

'06

'08

'10

'12

'14

'16

Source: National Association of Realtors

Pending Existing Home Sales
Index, 2002: Jan = 100

The National Association of Realtors

130

index of pending sales of existing homes

120

rebounded to a seven-month high in

110

February. The index is a leading indicator

100

of existing home sales, which are recorded

90

at the closing of the sale. The National
Association of Realtors is projecting that

80

existing home sales will rise 2.4 percent in

70

2016.

60
'02

'04

'06

'08

'10

'12

Source: National Association of Realtors, Treasury Calculation

10

'14

'16

Home Prices

April 2016
Changes in Home Prices

After rising at a high single-digit to
low-double-digit pace in late 2013 and
early 2014, the pace of home price

24

12-month percent change

16
8

appreciation has eased. Home prices are
now growing at a more sustainable mid-

0

single-digit pace.

20-City Case-Shiller

-8

FHFA Purchase-Only
CoreLogic

-16
-24

Zillow

'00

'02

'04

'06

'08

'10

'12

'14

'16

Source: Standard and Poors, FHFA, CoreLogic, Zillow

Home prices remain below their precrisis peaks. Most measures for the nation
as a whole are currently around early 2005
levels. The FHFA Purchase-Only Home Price
Index is the only one that has surpassed its
pre-recession peak. Forecasters generally
believe that home price appreciation will
remain moderate going forward.
Participants in the 2016Q1 Pulsenomics/
Zillow home price survey expect home
prices to rise 3.7 percent over the four

Home Prices
Index, January 2000 =100

220

20-City Case-Shiller
FHFA Purchase-Only
CoreLogic
Zillow

200
180
160
140
120
100

'00

'02

'04

'06

'08

'10

'12

'14

'16

Source: Standard and Poors, FHFA, CoreLogic, Zillow

quarters of 2016.

Price-to-Rent Ratio

Percent
2.0

The ratio of home prices to rents, a

1.8

common way to assess whether home

1.6

prices are overvalued, remains well below

1.4

its pre-crisis peak. That said, the
substantial appreciation of home prices

1.2

since late 2012 has pushed up this ratio, and

1.0

it is now above its pre-crisis range.

0.8
'84

'87

'90

'93

'96

'99

'02

'05

'08

'11

Source: Ratio of CoreLogic National Home Price Index to CPI Owner's Equivalent
Rent. Both Indexes set to 100 in January 1983.

11

'14

Mortgage Originations

April 2016
Mortgage Applications
Index, 2000:Jan 7 = 100

3000

Applications for home purchase
mortgages have been trending upward

210

Purchase (right scale)

180

2500

over the past year. Even so, purchase

150

2000

applications remain well below pre-crisis

Refinance (left scale)

levels. Refinancing activity has been very
low since mid-2013 as most borrowers who

120

1500
1000

90

have been able to refinance have already

60

500

done so.

30

0

0
'00

'03

'06

'09

'12

'15

Source: Mortgage Bankers Association

New mortgage originations have

New Originated Installment Loan Balances

increased over the past year but

Billions

remain low by pre-crisis standards.

250

New mortgage originations rose to
$437 billion in 2015Q4, up from a low of
$354 billion in 2014Q4. The low level of
mortgage originations stands in contrast
to the pattern of some other forms of

Billions
900

Auto Loan (Left Axis)
200

700
Mortgage (Right Axis)

150

originations, which have been increasing
briskly along with sales and now stand
near the top of their historical range.

400
300

200

50

100
0

0
'04

'06

since its 2009 high, but remains
significantly higher than pre-crisis levels.
About 70 percent of new mortgages were
backed by the FHA, VA, or GSEs in the first
three quarters of 2015 (dark blue and light
blue portions of bars). While bank portfolio
lending has increased noticeably, the
private-label mortgage-backed securities
market has experienced essentially no
recovery since collapsing in late 2007.

'08

'10

'12

'14

Source: Federal Reserve Bank of New York

Mortgage Originations by Investor

The share of new mortgage originations
backed by the government has fallen

600
500

100

household credit, including auto loan

800

GSE securitization

FHA/VA securitization

PLS securitization

Portfolio

Share, percent

100%
80%
60%
40%
20%

0%
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 2015
Q1-3

Source: Inside Mortgage Finance and Urban Institute

12

Delinquencies, Foreclosures and Distressed Sales

April 2016

Foreclosure and Delinquency Rates
Mortgage foreclosure and delinquency
rates continue to normalize. The share of
homes in foreclosure declined to 1.6 percent
of outstanding loans in 2015Q4. The rate of
mortgages in default (90+ days delinquent
or in foreclosure) fell to 3.4 percent in

Percent

12

Percent of loans 90 days or
more delinquent or in
foreclosure

10

8
6

2015Q4, compared with a pre-crisis average

4

of around 2 percent.

Percent of loans in
foreclosure

2

Percent of loans 90 or
more days delinquent

0
'00

'02

'04

'06

'08

'10

'12

'14

Source: Mortgage Bankers Association and Haver Analytics

Re-Default Rate 24 Months after Modification

Re-default rates for borrowers who have
received a mortgage modification have

80

Percent

Fannie Mae
Government-Guaranteed
Portfolio Loans

run significantly lower for mortgages that
were modified more recently. Mortgages

Freddie Mac
Private
Overall

60

that were modified in 2013 (24 months ago)
had re-default rates that were between 32

40

and 55 percentage points lower than those
modified in 2008.

20

0
'08

'09

'10

Source: OCC Mortgage Metrics Report for Q1-2015

'11

'12

'13

Distressed Sales as a Percent of Total Sales

The share of sales represented by REO
sales has trended down over the past 3
years. In January 2016, REO sales ticked up

Percent
35

Short Sales Share

REO Sales Share

30

slightly to around 8 percent of total sales.

25

The share associated with short sales

20

remained relatively constant at around 3

15

percent in recent months.

10

5
0

'06

'07

Source: CoreLogic

13

'08

'09

'10

'11

'12

'13

'14

'15

'16

Negative Equity
Rising home prices have greatly reduced
the number of underwater borrowers.
The share of mortgage loans with negative
equity was 8.6 percent in 2015Q4, down
from 10.3 percent in 2015Q1. The number of
homes now underwater stands at
4.3 million, a 64 percent drop since the 2011
peak. Mortgages that are very underwater,
with negative equity exceeding 25 percent,
have declined and are now 37 percent of all
underwater mortgages.

April 2016
Share of Loans that are Underwater by
Loan-to-Value Ratio

Percent
30

100-105

25

105-125

125+

20
15
10
5

0
'10

'11

'12

'13

'14

'15

Source: CoreLogic Equity Report, 2015 Q4

Amount of Negative Equity
Billions of dollars
800

The aggregate amount of negative
equity continues to fall. Since 2010Q1,

600

aggregate negative equity has fallen from
over $800 billion to around $300 billion in

400

2015Q4.
200

0

'10

'11

'12

'13

'14

'15

Negative Equity Share in Top 5 States
Negative equity rates are still very high
in some states. Around 20 percent of
mortgaged residential properties in Nevada

20.0

18.7

18.0

17.1

16.0

14.6

14.0

and Florida still have negative equity.

13.5

12.0

However, these rates have fallen by more

14.0

10.0

than half in these two states since the

8.0

beginning of 2013.

6.0

4.0
2.0
0.0
NV

14

FL

IL

AZ

RI

State Detail
Serious delinquencies have fallen across
the country but the degree of
improvement varies by state. They remain
near peak levels in some states, particularly
in judicial foreclosure states such as New
Jersey and New York. However, serious
delinquencies are down nearly 75 percent

April 2016
Serious Delinquencies for 25 Highest-Rate States:
Q4 2015
Percent, since Q1 2000

25

Q4 2015 value

Minimum since Q1 2000

Maximum since Q1 2000

20
15
10

from their peak in Florida, a judicial state
the foreclosure process. Serious
delinquencies have also fallen markedly in
hard-hit areas with flexible foreclosure laws,

5
0

NJ
NY
ME
FL
MS
DE
RI
CT
MD
NV
PA
IL
OH
DC
NM
IN
MA
HI
LA
OK
KY
AL
VT
SC

that passed a law in June 2013 speeding up

Source: Mortgage Bankers Association/Haver

such as Nevada.
Foreclosure Inventories by State as a
Percent of All Mortgage Homes
Foreclosure inventories have declined in
many states but remain relatively high
in others. Judicial foreclosure is an
important factor: 12 of 23 states that
employ the practice have noticeably
elevated rates (darker red). Other states
with high inventories, like Nevada, are still
struggling economically.

Source: CoreLogic Market Pulse, data as of January 2016

15

Information Memo Clearance Sheet
Subject:

April 2016 Housing Dashboard

Drafted:

Economic Policy – Marcelo Yoon 622-6423
Erin Troland 622-0181

Approved:

Economic Policy – Karen Dynan (4/19/16)

Cleared:

Exec Sec –
Economic Policy – Jane Dokko (4/19/16)


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102