The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
The Office of Economic Policy HOUSING DASHBOARD May 17, 2016 The housing recovery continues to support broader economic activity. Residential investment rose at an annual rate of 15 percent in 2016Q1, contributing 0.5 percentage point to GDP growth. Meanwhile, residential construction employment has continued to rise steadily. Single-family housing starts appear to remain on a gradual uptrend, but multifamily starts have pulled back somewhat from the strong levels seen in the first half of last year. National 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. That said, home price valuations look to be somewhat elevated relative to pre-bubble norms. Housing affordability for the typical family has diminished considerably because of the rebound in home prices but remains high by historical standards because of very low mortgage rates. 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 continues to drop, and the number of underwater borrowers is down by nearly two-thirds since 2011. This month’s dashboard includes a special topic that explores housing supply conditions in the United States, including the availability of homes for sale and how supply conditions appear to be affecting different geographies and market segments. Housing Market Flash May 2016 Housing Market Flash Tuesday, May 17, 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-09 511 Mar-16 4,760 Mar-16 246 Mar-16 1,740 Mar-16 778 Apr-16 736 Apr-16 (index, Jan 2000 = 100) Inflation-Adjusted Housing affordability 127 190.0 101.9 139.3 8.5% 6.1% 21 thousands -47 thousands 13.4% 9.9% 5.4% Improved Improved Weakened Improved Improved -44.5% -0.4% -65 thousands -96 thousands -39.6% -41.5% Mar-16 6.3% 101.1 169.3 Jul-06 (NAR, index=100 when median family income qualifies for 80% LTV mortgage on a median priced home) Improved Mar-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) Mar-16 8 Jan-09 58 May-16 point(s) 117 Oct-08 156 May-16 point(s) Improved Improved -2.6% 64.2% 24.8% 33.7% Weakened Sentiment 59 Homebuilder (NAHB, over 50 means majority view conditions positively) Home-buying conditions 152 (Reuters/Umich, index = good time - bad time + 100) 5 -1 Improved point(s) Weakened point(s) Weakened thousands -3 4 Demographics Household formation 1,113 (thousands) Homeownership rate (percent) 67.7 100 541 2008-Q4 2016-Q1 -261 thousands -572 63.5 63.6 -0.6 -4.1 2015-Q2 2016-Q1 percentage point(s) Weakened percentage point(s) 1 Special Topic: Housing Supply Conditions Since 2012, the inventory of unsold single-family homes has been 9 to 13 percent below its pre-bubble average. This shortfall mostly owes to fewer existing May 2016 Unsold Single Family Homes Millions of units New Homes 3.5 Existing Homes 3.0 homes for sale, which typically make up the bulk of sales inventories. In 2015, the total 2.0 number of unsold homes sat at 1.8 million, Average 1990 - 2003 2.5 1.5 the second lowest it has been in 22 years. 1.0 0.5 0.0 '90 The current low level of the inventory to sales ratio is also suggestive of a low supply of homes for sale. In a balanced housing market, where the supply of homes '92 '94 '98 '00 '02 '04 '06 '08 '10 '12 '14 Single Family Home Inventory-to-Sales Ratio 10 8 for sale is sufficient to meet the implied demand for homes given by demographics '96 Source: National Association of Realtors, Census Bureau, Haver Analytics & Treasury calculations. Average 1990 - 2003 6 and demolitions, it typically takes six to seven months to exhaust the available inventory of homes for sale. During the housing crisis, housing supply expanded and sales volume declined, increasing the inventory to sales ratio to a peak of 8.7 in 2008. By 2015, the ratio fell to 4.2, below its 4 2 0 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 Source: National Association of Realtors and Census Bureau. pre-bubble average. Homes-for-Sale Inventory as a Percent of The number of homes for sale as a percent Households of the number of households remains below pre-bubble levels. During the late 1990s and early 2000s, there were around 2 to 2.5 homes for sale for every 100 households. This figure increased to nearly 4 homes for sale per 100 households during the housing bubble. In more recent years, this figure has dropped to below 2 homes per hundred households. Source: CoreLogic. 2 '14 Special Topic: Housing Supply Conditions Housing vacancies are down to 1.9 percent, approaching their prebubble average of 1.6 percent. The vacancy rate measures the number of vacant homes for sale as a percent of the housing stock that could be owneroccupied. Lower rates of housing vacancies indicate a tighter housing market, as there are fewer homes on the market as a proportion of the total housing stock. May 2016 Housing Vacancies Percent 3.0 2.5 2.0 Average 1990 - 2003 1.5 1.0 0.5 0.0 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 Source: Census Bureau Housing vacancies vary considerably by state. Among those with low vacancies, shaded in light blue, many are western states like Utah, South Dakota, and Wyoming that were less affected by the housing crisis and have had consistently low vacancies over the past ten years. Other states with low vacancies include North Dakota and Texas, where net migration has been positive due to the oil and gas boom. States with high vacancy rates include New Jersey and Florida, where the foreclosure inventory remains elevated due to delays in processing foreclosures. Housing Vacancies by State, 2015Q4 Source: Census Bureau. AK vacancy rate 2.3, HI vacancy rate 1.4. 3 Special Topic: Housing Supply Conditions May 2016 The size of newly built homes has changed in recent years, with the construction of smaller homes lagging behind historical levels. Before 2003, homes less than 1600 square feet, typically considered starter homes, accounted for around 30-40 percent of the market, while homes greater than 3000 square feet were around 15 percent. Since 2011, 30 percent of newly-built units have been large homes, while the starter market share has been just 15 percent. Damped construction of smaller units is limiting starter home availability for first-time Source: Calculated Risk and Census Bureau. homebuyers. Cumulative Price Growth Through January 2016 by Price Tier Price increases have been strongest for homes priced below the median, reflecting in part the slowdown in new construction of starter homes. Since the recession, the least expensive homes (less than 25 percent of the median home price) have seen prices rebound more than 50 percent (gray bars) through January 2016, compared with just under 30 percent for homes priced more than 25 percent above the median. In the year ending January 2016, the least-expensive homes posted 10 Source: CoreLogic. percent price gains (red bars) versus 4 percent for the most expensive homes. Land Use Restrictions and Number of Adults per Household Restrictive land-use regulation is one explanation for why the supply of starter homes has lagged. Least restrictive Less restrictive More restrictive Most restrictive 2.2 2.14 Typically, rising prices signal to builders that new 2.09 construction is likely to be profitable. However, 2.09 2.1 restrictive land-use regulations discourage building 2.03 and tilt construction in favor of more expensive 2.13 2.07 2.04 1.99 2.0 homes, both of which worsen affordability. With rising housing costs, more adults are likely to share their home with family or friends. Compared to 2011, the number of adults per household in 2014 rose by slightly more in cities with more restrictive regulations. 4 1.9 2011 2014 Source: Zillow 2011 2014 2011 2014 2011 2014 Housing’s Importance to the Economy Residential investment continues to support GDP growth. Residential investment rose at an annual rate of 15 percent in 2016Q1, adding Percent 10.0 May 2016 Residential Investment's Contribution to Real GDP 8.0 6.0 0.5 percentage point to real GDP growth, 4.0 surpassing the 0.3 percentage point 2.0 average contribution over the previous four 0.0 quarters. (The recent flatness in housing starts will take some time to be reflected in residential investment because of the lags associated with construction.) -2.0 -4.0 -6.0 GDP (% Change, Annual Rate) Residential Investment's Contribution -8.0 -10.0 '00 '02 '04 '06 '08 '10 '12 '14 Source: Bureau of Economic Analysis Employment in residential construction continues to recover. Over the past year, Employment in Residential Construction Millions Percent 4.0 4.0 it has increased by 11,700 jobs per month, compared with 12,500 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 employment, Number Employed (left scale) 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 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 compared with around 2.6 percent in the 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 5 '06 '08 '12 '14 '16 Housing Starts and Inventories May 2016 Since last summer, housing starts have been about flat, as further increases in Starts and Permits Millions 2.0 single-family starts have about offset a pullback in multifamily starts. Singlefamily starts (light blue line) rebounded in 1.5 April, and appear to be on a gradual 1.3 uptrend. Multifamily starts (black line) 1.0 surged in the first half of 2015 but have 0.8 since moderated. Single-Family Starts 1.8 0.5 Single-Family Permits Multifamily Starts Multifamily Permits 0.3 0.0 '00 '02 '04 Source: U.S. Census Bureau Builder confidence remained upbeat in '10 '12 '14 '16 80 Homebuilders index has recorded readings '08 Builder Confidence Index May. The National Association of '06 70 above 50 (meaning a majority of builders 60 view the market positively) for the last 50 23 months. All three of the index’s 40 components—sales expectations over the 30 next six months, current sales, and buyer 20 traffic—are above their 2014 averages. 10 0 '00 '02 '04 '06 '08 '10 '12 '14 '16 Source: National Association of Homebuilders The inventory of homes for sale remains Millions of existing homes for sale (dark blue line) Unsold Homes Millions well below historical averages. The stock Thousands 4.5 was at 1.98 million units at the end of 3.5 which was the lowest level since December Existing (left scale) 4.0 March, up from 1.76 million in December, 700 3.0 1999. The stock of new homes for sale (light blue line) was at a 7½-year high of 500 Series average 2.5 246,000. At the current sales pace, there is 1.5 available for sale; for new homes, the available inventory is equivalent to a 5.8-month supply. 400 300 Series average 2.0 4.5-month supply of existing homes 600 200 New (right scale) 100 1.0 0 '02 '04 '06 '08 '10 '12 Source: National Association of Realtors and U.S. Census Bureau 6 '14 '16 Underpinnings of Housing Demand May 2016 Interest Rate of 30 Year Fixed-Rate Mortgages 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 3.57 percent in the week ending May 12. The current rate is only 26 basis points higher than the lowest rate recorded in 2012. Percent 9 8 7 6 5 4 3 '00 '02 '04 '06 '08 '10 '12 '14 '16 Source: Freddie Mac The National Association of Realtors Home Affordability Index Housing Affordability Index suggests that 240 housing remains affordable for the typical 220 family. Affordability has diminished 200 considerably since 2013 as home prices have 180 risen, but has stabilized recently due to 160 relatively low mortgage rates. (Note that the 140 index assumes a 20 percent down payment; 120 interest rates would be higher and 100 Record Affordability Index = 214.5 Historic Average (data since 1971) 80 affordability would be lower for a family that '00 made a smaller down payment). '02 '04 '06 '08 '10 '12 '14 '16 '14 '16 Source: National Association of Realtors Attitudes Towards Buying Households remain positive about home buying conditions. The University of Michigan Consumer Survey’s “Good Time to Buy” Index remained slightly higher than the long-term average in mid-May. Low interest rates continue to be the main factor cited when respondents were asked why home-buying conditions are good. Index (Good minus Bad plus 100) 180 170 160 150 140 Long-Run Average (data since 1986) 130 120 110 100 '00 '02 '04 '06 '08 Source: University of Michigan Consumer Survey 7 '10 '12 Underpinnings of Housing Demand Senior loan officers at banks report easing mortgage lending standards in recent quarters. The last seven quarters mark the first period of sustained easing FRB Senior Loan Officer Opinion Survey on Mortgage Lending 100 Net Percent of Banks Reporting Tightening Standards 80 since the period of dramatic tightening 60 during the financial crisis. (Note that the May 2016 40 level of the line shown corresponds to the change in lending standards, with values below 0 representing an easing of lending Tightening 20 0 standards and values above 0 representing a -20 tightening). -40 Easing 90 94 98 02 08 10 14 Mortgage Originations by Credit Score 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 Billions of dollars with FICO scores below 660. 620-659 660-719 720-779 780+ 800 600 400 200 well below pre-crisis levels. Almost no mortgages are being extended to borrower <620 1,000 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 800 The median FICO score of newly originated mortgages has fallen slightly in recent Score 750 quarters to around 750, but is still up 700 from roughly 700 in the early 2000s. At median 650 the 10th percentile, the FICO score for new 25th percentile 10th percentile mortgages was down to 642 by the end of 600 2015, compared with less than 600 in the 550 early 2000s. 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. 8 '14 Household Formation Household formation fell sharply over the last two quarters. In the year ending in March, just 538,000 households were formed. The explanation for the decline May 2016 Household Formation Millions 3.0 2.5 over the past six months 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 Employment-to-Population Ratio Ages 25-34 Percent working has seen a partial recovery. The 84 employment-to-population ratio for 82 individuals ages 25-34 has reversed more 80 than half of the decline that occurred during 78 the recession. The strengthening labor market should support household formation going forward. 76 74 72 70 '00 '02 '04 '06 '08 '10 '12 '14 '16 Source: Bureau of Labor Statistics Growth in Rents vs. Overall Inflation Higher rents are an obstacle to young Year-over-year percent change 7.5 adults establishing their own households. The supply of rental housing appears to 5.0 CPI-U: Rent of Primary Residence have not risen as fast as demand and, as a result, rents have been increasing rapidly. They outpaced overall inflation by 2.6 percentage points over the year ending in April. 2.5 0.0 CPI-U: All Items -2.5 '00 Source: BLS 9 '02 '04 '06 '08 '10 '12 '14 '16 Homeownership The homeownership rate slipped in 2016Q1. The homeownership rate was 63.6 percent in 2016Q1, down from 63.7 in the previous quarter, and just marginally higher than the four-decade low of 63.5 percent in 2015Q2. The homeownership rate may stagnate in coming quarters as household formation continues to recover because May 2016 Homeownership Rate Percent 70 68 66 64 62 newly formed households are more likely to rent before purchasing a home. 60 '80 '85 '90 '95 '00 '05 '10 '15 Source: U.S. Census Bureau Percent First-time home buyers account for around half of purchase mortgage Share of Mortgages Accounted by First-time Buyers 55 53 originations. The share of newly originated mortgages going to first-time buyers was 51 52.1 percent in March, higher than the 51.4 percent recorded a year ago. 49 47 '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 a home (35 percent). Cannot afford downpayment 59 0 10 20 30 40 Percent 50 60 70 Source: Report on Economic Well-Being of U.S. Households in 2014, Federal Reserve Board 10 Home Sales New single-family home sales remain on May 2016 New-Single Family Home Sales Thousands a very gradual uptrend. At an annual rate 1600 of 511,000 in March, they were 1.6 percent 1400 higher than their average level in 2015. 1200 New single-family home sales averaged 1000 503,000 units for all of 2015, the best annual 800 performance since 2007. Still, the current 600 pace of sales is only about half the level 400 seen prior to the boom in the early 2000s. 200 0 '02 '04 '06 '08 '10 '12 '14 '16 Source: U.S. Census Bureau Sales of existing single-family homes Existing Single-Family Home Sales Millions 7 have been moving sideways in recent months at a level that is only a little below that seen in the early 2000s. Existing single-family home sales rebounded in March following a sharp drop 6 5 4 in the previous month. Existing home sales also showed sharp swings last fall because of new mortgage disclosure regulations that reportedly delayed contract signings by a 3 2 '00 '02 '04 '06 '08 '10 '12 '14 '16 Source: National Association of Realtors few days. Pending Existing Home Sales Index, 2002: Jan = 100 The National Association of Realtors 130 index of pending sales of existing homes 120 rose to a ten-month high in March. The index is a leading indicator of existing home sales, which are recorded at the 110 100 closing of the sale. The National 90 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 11 '14 '16 Home Prices May 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 appreciation has eased. Home prices are 8 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 Home Prices Index, January 2000 =100 220 20-City Case-Shiller FHFA Purchase-Only CoreLogic Zillow 200 180 160 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 140 120 100 '00 '02 '04 quarters of 2016. common way to assess whether home '08 '10 '12 '14 '16 Price-to-Rent Ratio Percent The ratio of home prices to rents, a '06 Source: Standard and Poors, FHFA, CoreLogic, Zillow 2.0 1.8 prices are overvalued, remains well 1.6 below its pre-crisis peak. That said, the 1.4 substantial appreciation of home prices since late 2012 has pushed up this ratio, and it is now above its pre-crisis range. 1.2 1.0 0.8 '84 '88 '92 '96 '00 '04 '08 '12 Source: Ratio of CoreLogic National Home Price Index to CPI Owner's Equivalent Rent. Both Indexes set to 100 in January 1983. 12 '16 Mortgage Originations May 2016 Mortgage Applications Applications for home purchase Index, 2000:Jan 7 = 100 mortgages have been trending upward 3000 over the past year. Even so, purchase 210 Purchase (right scale) 180 2500 applications remain well below pre-crisis levels. Refinancing activity has been very low since mid-2013 as most borrowers who 150 2000 1500 Refinance (left scale) have been able to refinance have already 120 90 1000 done so. 60 500 30 0 0 '00 '04 '08 '12 '16 Source: Mortgage Bankers Association New Originated Installment Loan Balances New mortgage originations have increased over the past year but remain low by pre-crisis standards. 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 Billions Billions 250 900 Auto Loan (Left Axis) 200 700 Mortgage (Right Axis) 150 household credit, including auto loan originations, which have been increasing 600 500 400 100 to the pattern of some other forms of 800 300 200 50 100 0 0 briskly along with sales and now stand '04 near the top of their historical range. Source: Federal Reserve Bank of New York since its 2009 high, but remains higher than boom levels. About 70 percent of new mortgages were backed by the FHA, VA, or GSEs in 2015 (dark blue and light blue portions of bars). While bank portfolio lending has increased noticeably, the private-label mortgage-backed securities '08 '10 '12 '14 Mortgage Originations by Investor The share of new mortgage originations backed by the government has fallen '06 GSE securitization FHA/VA securitization PLS securitization Portfolio Share, percent 100% 80% 60% 40% 20% market has experienced essentially no 0% recovery since collapsing in late 2007. Source: Inside Mortgage Finance and Urban Institute '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 13 Delinquencies, Foreclosures and Distressed Sales Mortgage foreclosure and delinquency rates continue to normalize. The share of homes in foreclosure declined to 1.6 percent of outstanding loans in 2016Q1. The rate of Foreclosure and Delinquency Rates Percent 12 Percent of loans 90 days or more delinquent or in foreclosure 10 mortgages in default (90+ days delinquent 8 or in foreclosure) fell to 3.3 percent in 6 2016Q1, compared with a pre-crisis average of around 2 percent. May 2016 Percent of loans in foreclosure 4 Percent of loans 90 or more days delinquent 2 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 Percent 35 sales has trended down over the past 3 REO Sales Share 30 years. In February 2016, REO sales stayed Short Sales Share 25 around 8 percent of total sales. The share associated with short sales remained 20 relatively constant at around 3 percent in 15 recent months. 10 5 0 '06 '07 Source: CoreLogic 14 '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. May 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 has fallen significantly. Since 600 2010Q1, aggregate negative equity has fallen from more than $800 billion to 400 around $300 billion in 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 15 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 May 2016 Serious Delinquencies for 25 Highest-Rate States: Q1 2016 Percent, since Q1 2000 25.00 Q1 2016 value Minimum since Q1 2000 Maximum since Q1 2000 20.00 15.00 delinquencies are down more than 75 state that passed a law in June 2013 speeding up the foreclosure process. Serious delinquencies have also fallen markedly in hard-hit areas with flexible 10.00 5.00 0.00 NJ NY ME FL DE RI CT MS DC MD NV HI PA NM OH IL MA LA IN OK KY VT AL SC AR percent from their peak in Florida, a judicial Source: Mortgage Bankers Association/Haver foreclosure laws, such as Nevada. Foreclosure Inventory by State Foreclosure inventories have declined in AK many states but remain relatively high in VT others. Judicial foreclosure is an important WA MT ND MN WI factor: 15 of 25 states that employ the ID WY SD practice have noticeably elevated rates (two OR NV CO darkest shades). Other states with high CA inventories, like Nevada, are still struggling IL IN NY MA OH PA OK AR TN NC LA MS AL FL HI Source: CoreLogic Market Pulse, data as of February 2016 16 0.5 0.9 SC GA TX 0.3 NJ NE MO KY WV VA MD DC UT NM KS AZ economically. IA MI NH ME 1.3 2.2 4% DE CT RI
@FedFRASER