National Credit Default Rates Ticked Up in November 2012 According to the S&P/Experian Consumer Credit Default Indices

S&P Dow Jones Indices released the latest results for the S&P/Experian Consumer Credit Default Indices. Data is through November 2012.
S&P/Experian Consumer Credit Default Indices Press Release – December 2012

Foreclosure Activity Slips in November

RealtyTrac® released its U.S. Foreclosure Market Report™ for November 2012 this week. The report shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 180,817 U.S. properties in November, a decrease of 3 percent from October and down 19 percent from November 2011 — marking the 26th consecutive month with an annual decrease in foreclosure activity. The report also shows one in every 728 U.S. housing units with a foreclosure filing during the month.

 “The drop in overall foreclosure activity in November was caused largely by a 71-month low in foreclosure starts for the month, more evidence that we are past the worst of the foreclosure problem brought about by the housing bubble bursting six years ago,” said Daren Blomquist, vice president at RealtyTrac. “But foreclosures are continuing to hobble the U.S. housing market as lenders finally seize properties that started the process a year or two ago — and much longer in some cases. We’re likely not completely out of the woods when it comes to foreclosure starts, either, as lenders are still adjusting to new foreclosure ground rules set forth in the National Mortgage Settlement along with various state laws and court rulings.”

Highlights of the report: 

  • U.S. foreclosure starts were down 13 percent from the previous month and down 28 percent from a year ago to the lowest level since December 2006 — a 71-month low.
  •  U.S. bank repossessions (REO) increased 11 percent from the previous month and were up 5 percent from November 2011, a nine-month high and the first year-over-year increase in REOs since October 2010.
  •  Despite the national decrease in foreclosure activity — driven largely by big year-over-year drops in California, Georgia, Michigan, Texas and Arizona — foreclosure activity increased from a year ago in 23 states and the District of Columbia. Nine states posted 12-month highs in foreclosure activity in November, including Florida, New Jersey, New York, Ohio and South Carolina.
  •  Florida posted the nation’s highest state foreclosure rate for the third month in a row, with one in every 304 housing units with a foreclosure filing in November, followed by Nevada, Illinois, California and South Carolina.
  •  Seven of the top 10 highest metro foreclosure rates nationwide were in Florida, led by Palm Bay-Melbourne-Titusville. The other three metros in the top 10 were in California.
  •  Foreclosure starts — default notices or scheduled foreclosure auctions, depending on the state — were filed for the first time on 77,494 U.S. properties in November, down 13 percent from the previous month and down 28 percent from November 2011. November’s foreclosure starts were at the lowest level since December 2006.
  •  Foreclosure starts decreased from a year ago in 28 states, including Oregon (84 percent), Pennsylvania (67 percent), California (63 percent), Arizona (59 percent), and Georgia (51 percent).
  •  Foreclosure starts increased from a year ago in 18 states, including New Jersey (538 percent), Arkansas (455 percent), New York (209 percent), Washington (97 percent), and Connecticut (95 percent).

 Bank repossessions increased annually for the first time in 25 months — Lenders completed the foreclosure process on 59,134 U.S. properties in November, an 11 percent increase from the previous month and a 5 percent increase from November 2011 — the first year-over-year increase in bank repossessions since October 2010, when the practice of robo-signing foreclosure documents came to light and caused a sharp slowdown in foreclosure activity in the following months.

  •  REO activity increased annually in 29 states and the District of Columbia. Some of the biggest increases were in Indiana (96 percent), Arkansas (88 percent), Missouri (87 percent), New Jersey (84 percent), and Connecticut (60 percent).
  •  REO activity decreased annually in 21 states, including Nevada (64 percent), Oregon (58 percent), Massachusetts (49 percent), Utah (47 percent), and Tennessee (22 percent).

Home Building Boosts Construction Employment

Now that the housing sector is (finally) contributing to the economy, a natural question is whether employment will be boosted by increased home construction. The chart tells the story.  It  shows the number of workers in residential construction and the number of single family and toal number of homes under construction.  The total number of homes under construction has rebounded faster than single family homes, driven by apartments and rising rents.  The data are in thousands — thousands of workers and thousands of homes.  The difference between the total homes under construction and single family homes is apartment construction.

Employment Rises With Construction

Source: US Bureau of the Census (construction) and US Bureau of Labor Statistics (employment)

 The employment data are from the Bureau of Labor Statistics and the monthly employment report, the homes under construction are from the Bureau of the Census.

Rent-Buy and Price-Income Data Show Continuing Improvement in Housing

Price-Income ratios, based on both disposable and per capita disposable income point to moderate gains in the last three months as home prices continue to advance. A comparion of buying and renting shows that the ratio slightly favors buying compared to the average market condition since 1987, leaving room for further gains in housing.  The charts show these relations.

Comparing Home Prices to Incomes

Price to income uses the S&P/Case-Shiller 10-City Composite seasonally adjusted and seasonally adjusted data for disposable personal income and per capita disposabale personal income. “Disposable” means after federal income taxes; per capita divides income by population to correct from increases in income due to increased population.  The Rent-Buy comparison uses the Consumer Price Index series for rent of a primary residence to measure rents and the S&P/Case-Shiller 10-City Composite to measure home prices; both series are seasonally adjusted.

The U.S. Real Estate Industry: Standard & Poor’s Addresses The Top Investor Questions

Why The FHA’s Reserve Shortfall Won’t Likely Affect U.S. Public Finance Housing Ratings

CNBC Exclusive Interview with David Blitzer on U.S. Home Prices for September

David Blitzer, Managing Director and Chairman of the S&P Index Committee, discusses the latest data results for the S&P/Case-Shiller Home Price Indices on CNBC.

Home Prices Rise for the Sixth Straight Month According to the S&P/Case-Shiller Home Price Indices

Data through September 2012, released today by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, showed that home prices continued to rise in the third quarter of 2012.  To access click here:  S&P/Case-Shiller Home Price Indices – November 2012

Foreclosure Activity Ticked Up in October

RealtyTrac® (www.realtytrac.com), last week released its U.S. Foreclosure Market Report™ for October 2012, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 186,455 U.S. properties in October, an increase of 3 percent from September but still down 19 percent from October 2011. The report also shows one in every 706 U.S. housing units with a foreclosure filing during the month. 

“We continued to see vastly different foreclosure trends across the country in October, depending primarily on how each state’s foreclosing infrastructure was able to handle the high volume of delinquent loans during the worst of the foreclosure crisis in 2010,” said Daren Blomquist, vice president of RealtyTrac.”Unfortunately the three states dealing with the biggest rebound in deferred foreclosure activity — New Jersey, New York and Connecticut — also had to deal with the devastation to homes inflicted by super storm Sandy. The foreclosure moratoriums being put into effect as a result of the storm will likely extend the already-lengthy time to foreclose in these states, further prolonging a fundamentally sound housing recovery.” 

High-level findings from the report: 

 The three states with the biggest annual increases in foreclosure activity in October were New Jersey (140 percent), New York (123 percent) and Connecticut (41 percent). Other states with sizable increases were Maryland (27 percent), Ohio (24 percent) and Illinois (19 percent).

 An analysis of foreclosure activity and inventory in the counties most impacted by super storm Sandy in Connecticut, New Jersey and New York shows foreclosure activity in October was down 8 percent from September but up 92 percent from a year ago, and an estimated $41 billion in foreclosure inventory in those counties.

 Florida posted the nation’s highest foreclosure rate for the second month in a row, with one in every 312 housing units with a foreclosure filing in October, followed by Nevada, Illinois, California and Arizona.

 Scheduled foreclosure auctions in October increased 9 percent from September, while default notices and bank repossessions (REO) were virtually unchanged from the previous month.

 Foreclosure activity increased  on a month-over-month basis in more than half of the 212 metro areas tracked in the report, and jumped significantly in some hard-hit metro areas, including Modesto, Calif. (up 68 percent), Sarasota, Fla. (up 53 percent), Las Vegas, Nev. (up 45 percent), Columbus, Ohio (up 61 percent), and Columbia, S.C. (up 58 percent).

 Foreclosure starts increase from previous month, down from a year ago

Foreclosure starts — default notices or scheduled foreclosure auctions, depending on the state — were filed for the first time on 89,209 U.S. properties in October, a 2 percent increase from September but still down 19 percent from October 2011 — the third straight month with an annual decrease in foreclosure starts.

 Foreclosure starts increased from the previous month in 26 states, including Nevada (54 percent), Tennessee (52 percent), Minnesota (28 percent), North Carolina (26 percent), New York (17 percent) and Georgia (16 percent).

 Foreclosure starts increased from a year ago in 15 states, including New Jersey (286 percent), Washington (163 percent), New York (163 percent), Pennsylvania (42 percent), North Carolina (38 percent), and Nevada (20 percent).

S&P/Case-Shiller Home Prices Report due Tuesday 11/27

The S&P/Case-Shiller report on home prices for September is due on Tuesday morning November 27th at 9 AM.  Forecasts point to further gains with the 20 city index advancing month to month and year-over-year.  The report comes amidst a long run of good housing news showing higher sales and starts as we move into the seasonally slower time of the year.  Trends point to housing making a positive contribution to GDP.  Full details will be posted here and at www.homeprice.standardandpoors.com.

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