Existing Home Sales Report (July 2014):
Summary of July 2014 Existing Home Sales Report
- Single family home sales were up 2.4% from June 2014, and down 4.3% from July 2013;
- Existing home inventory was up 3.5% from June 2014 to 2.37 million homes;
- Distressed sales (foreclosures and short sales) comprised 9% of all existing home sales. 6% were foreclosures, 3% were short sales. The overall distressed sales figure for July 2014 is down 15% from July 2013. This month marks the first time distressed sales comprised less than 10% of existing home sales since the housing crisis.
- Average distressed property discounts: foreclosures sold at a 20% discount while short sales sold at a 14% discount.
- Investor Activity: Individual investors comprised 16% of existing home sales in July 2014. 69% of investors paid cash. Short sales average time on the market is 93 days, foreclosures on average stay on the market 58 days, and non-distressed properties remain on the market for an average of 45 days.
FHFA Takes Lead on Mortgage Finance Reform Effort
The failure of Congress to agree on a comprehensive housing reform bill this year does not mean housing reform is not happening. The Federal Housing Finance Agency (FHFA) has seized the opportunity to reform the mortgage finance industry in the absence of Congressional action. Ultimately, Congress will pass a housing reform bill, but by the time they get around to it most of the critical decisions will have been made by FHFA. Currently on the agenda for FHFA are the following issues which National REIA’s lobbying arm in Washington, D.C. will monitor:
- Common Securitization Platform: Fannie and Freddie use outdated technology and engage in duplicative activities in the mortgage securitization process. FHFA is working on creating the common platform and a common security to lower costs for consumers and reduce risk pricing distortion.
- Credit Availability: FHFA recognizes that borrowers with less than excellent credit and small down payments are having difficulties getting loans. Current FHFA leadership has placed credit availability as a top priority for the agency, and as important has de-prioritized the goal of reducing the scope and size of Fannie and Freddie. Action on affordable housing goals and expansion of credit availability will take place at FHFA in the near future.
- Mortgage Servicers: FHFA is considering placing capital requirements on non-bank mortgage servicers to reduce their potential risk to the housing market given their rapid growth. The Consumer Financial Protection Bureau has already passed regulations governing servicers designed to improve their performance in serving consumers, and additional regulations, including requiring a plan on how to service each mortgage in a portfolio before the rights are sold, are in the works.