In the housing market have recently shown signs of optimism : the home sales show mortgage rates historically low upward trend, the builder confidence has increased and , together with the sharp fall in house prices in relation to family income , have driven rates housing affordability to record highs. However, many potential buyers and sellers remain outside : the default rates of the residential sector and foreclosures remain persistently high , credit conditions remain tight , unemployment is high and the national indices of housing prices continue to fall . From its peak six years ago , the national average house price has fallen about 34 %. So many lenders , investors, buyers and sellers do not even notice the rebound . We believe the residential market in 2012 will remain under stress in many areas of the country , but in the growing markets opportunities for buyers to take advantage of record affordability, made real estate investments and avoid rising rents arise . " "
As a result of the drop in housing prices , the subsequent increase in foreclosures and the conditions under tighter credit , many families choose either inadvertently or not, rent rather than buy . The percentage of home ownership continues to decline and our analysis predicts that percentage dropped to 65% within 2-3 years. In a risk scenario , it could fall even faster, up to 64% , a level not seen since the early 1990s. This trend indicates that rental demand will remain high at least in the next five years. According to forecasts of household growth and the fall in the percentage of home ownership , the market will need about three million more rental units in 2016. " "
The fall in the percentage of home ownership supports low demand observed in the housing market . However, home sales and housing starts and seems to have bottomed last year , as we anticipate that these measures will continue its upward trend this year , albeit at a weak pace. The value of the construction of new single-family homes is on the rise year on year, and residential investment is finally making a positive contribution , however small, to GDP growth in early 2012 . Smaller stocks support new housing construction activity : monthly supply of new homes came to be about 6 months and still pointing downward with increasing sales rate . The return to a monthly supply of about 4 months is more consistent with a sanitized new housing market : a 23% average annual growth in the pace of new home sales combined with another 13 % drop in new home inventory would to place the figure of the monthly offer at 4% at the end of the year.
" " Prices continue to fall due to high inventory levels hidden
Despite the improvement in the pace of home sales and construction of new housing price index of existing homes will continue to fall throughout 2012 and possibly 2013. The pressures on housing prices are derived from the large inventory of seriously delinquent mortgages and foreclosed properties , which has reached record highs and has only recently begun a downward trend . The shadow inventory consists of nearly four million homes : there approximately 1.9 million homes are in some stage of execution, 1.3 million seriously delinquent (over 90 days), and 500,000 to 800,000 housing units in hands real estate that have completed foreclosure. Foreclosures attract buyers and investors, as approximately 25 % of all home sales corresponds to distressed properties (over 40 % in California and Arizona ) . How are you Properties are sold at substantial discounts of between 30% and 40% , it is expected that rates of aggregate housing prices continue to fall . However, property prices show stability without financial difficulties , but any price increase will be minimal and certainly negative in real terms .
" " It has erased a decade of real appreciation in prices
The real appreciation of housing prices observed over the past decade has been effectively nullified . The price indices adjusted for inflation have returned to their levels of 1998 - 1999 , and their continued combined with rising rents fall means the rent money should reach the above average to 2000 of 5.25 % in late 2012 . Both are positive signs for the housing recovery in late 2012 and 2013: the low mortgage rates today and the most favorable prices allow buyers to avoid inflation and rising rents . This is a reality that has not been overlooked by potential buyers : the leading indicators of trends in Google with respect to interest buyers show an increase in early 2012 .
The affordability at a record high demand supporting , while credit constraints could be an obstacle
The double-digit drop in housing prices relative to household income and combined with low mortgage rates have pushed housing affordability to unprecedented limits. Therefore, the data suggest that the market could fall more than ever first home buyers , as long as the buyers can get credit .
Certainly , lenders have tightened credit conditions for first-time buyers , loans and grants should continue to increase as to decrease the unemployment rate and the perceived risk of job loss is reduced. However, mortgage applications remain rare , indicating that despite record affordability , many potential buyers prefer to rent to buy. Possible reasons for the low demand expectations of further price falls , a history of underemployment , lack of savings to give an initial entry and over- growth of consumer credit are included . The deleveraging process continues in many homes while restoring their balance sheets, as income growth lagged consumption growth in late 2011 , now is moderating the rate of consumption .
" " The quality of the residential assets continues to improve slowly in the balance sheets of banks, but the high number of foreclosures remains a concern to many lenders
It is likely that strict credit conditions persist for some time, as delinquency rates for residential mortgages have remained stubbornly high and the flow of foreclosures fixed interest rates and low risk was not significantly moderate standard. Thus, evil can banks , Fannie Mae and Freddie Mac will loosen credit conditions to accommodate a larger number of buyers. We anticipate that the default rate will continue to fall throughout 2012, but will remain above 8 % until 2014. In addition , lenders are concerned , rightly, that more foreclosures occur because about 25 % of debtors ( some 12 million mortgages) owe more than their home is worth and 8.6 million are aware of your payments . Of the remaining 3.4 million who are behind on their payments, approximately 1.3 million are at serious delinquency . The risk of further falls in house prices and that more job losses puts borrowers with negative equity to the brink of default occur.
" " The federal government's efforts are focused on stem the flow of foreclosures ; aid and incentives for homeowners and lenders will be expanded. The Federal Reserve believes that the transmission channel its flexible monetary policy to housing market is under-performing , as sales and mortgage originations remain low. The Federal Reserve released a white paper in January explaining the pros and cons of the policies that the government can promote to help homeowners . These projects range from policy modification programs mortgages to plan large-scale conversion of real estate into the hands of the government and banks in rental properties. In line with this analysis , the current government is expanding programs to help homeowners , as refinancing program for affordable housing (HARP for its acronym in English ) , which aims to boost refinancing activity , and the program of affordable home mortgages (HAMP for its acronym in English ) , whose purpose is to encourage private lenders to modify mortgages and reduce the principal balances . Refinancing activity has picked up due to the extension of the scope of these programs, and the recent enlargement has been proposed HARP , the program will include investors and debtors whose relationship between the loan amount and the value of the property exceeds 80 % . Thus , borrowers with a loan -to-value ratio above 100 % could benefit from refinancing combination with principal reduction , so that would be creating equity. In recent weeks , a new ad has attracted the interest of investors : FHA has approved the program of own property rentals of Fannie Mae and Freddie Mac is developing a similar program that will allow investors to buy properties in large quantities and convert them into rental housing. Investors are attracted or big discounts on the purchase of these homes from foreclosure : rental units could generate positive returns due to rising rents and the possible sale of the property at a higher price. The two entities and government -sponsored FHA own about 215 thousand distressed properties that need to sell. According to the forecast demand for rental properties in the coming years , this program could help to moderate the rising rents and boost supply to meet new demand . However, this conversion program in rental properties will only have a positive effect if people want to live in areas with the highest number of foreclosures. Many of these areas are affected by high unemployment , low growth and limited employment opportunities for residents. During the housing boom , the flow of investment residential new construction stimulated the local economy by increasing tax collection and spending. Today , some of these communities are struggling with falling revenue from property taxes and the output of residents .
" " The high refinancing activity represents an opportunity for banks, but the direct economic impact will be minimal refinancing Because mortgage rates are exceptionally low , many borrowers refinance seems sensible to them their existing mortgages to lower monthly payments. The total volume of refinance originations was higher than of new mortgages over the past four years, as both interest rates and sales have experienced sharp declines . However, some borrowers can not refinance their loans either because loan -to-value ratio of the property is too high ( perhaps even negative equity ) or because the initial costs of the operation does not make refinancing worthwhile. Therefore, the federal government has proposed expanding the refinancing program (HARP ) allowing refinancing its loans to residential investors and removed initial disbursement of refinance for borrowers . There is no doubt that these changes will stimulate activity and may help lenders to charge fees and capture market share . Programs refinancing and mortgage modification are intended to encourage economic activity on two fronts. First, proponents argue that programs to reduce monthly payments will help to avoid default and subsequent foreclosure debtors on the brink of that situation. However, the evidence that the refinancing avoid foreclosures are unenthusiastic because the savings from refinancing can not totally replace the lost income of a job . Second, to reduce the monthly debt obligations , refinancing frees family income and allows consumers to spend more on the market, thus encouraging economic activity. However, the scope of the stimulus caused by the effects of first and second order , is minimal. Obviously , the loan for the purchase of a new home that puts $ 250,000 on the market has more than an effort refinancing saves the homeowner $ 100 to $ 300 a month impact. At the peak of the housing boom in 2005 , our estimates indicate that lenders were injecting to $ 300 billion ( $ bn) annually into the economy to buy new homes when both prices and sales of new homes shot . In 1995 , before the boom , lenders injected just under 100 billion dollars annually. Therefore, the direct cumulative effect of increased sales and prices was a boost to the economic activity of about $ 1 billion between 1997 and 2007. Since much of this money is reinvested in the housing market for new construction and therefore creating jobs, the second order effects were substantial and resulted in a sharp rise in economic performance and asset values . Although refinancing efforts reached 12 million borrowers with capital losses and will save each family $ 3,000 per year , only collective debt service in 36 mmd a year would be reduced well below the surplus of 200 billion dollars figure lenders were injected each year into the economy when housing was booming . In summary, although the refinancing federally backed mortgage modification program and conversion of own property will help reduce the debt burdens of homeowners and ease the inventory of distressed properties , the effects on economic growth in the short term will be minimal . However, reducing the inventory of distressed properties because rents and conversions to fewer foreclosures could contribute to the transition of the housing market towards equilibrium . In all the major U.S. regional variation in market fundamentals will determine the pace of home sales and new residential investment
Although house prices have fallen in all U.S. markets over the past four years, the collapse has been most acute in Arizona , California , Florida and Nevada . Recent indicators show that housing activity is picking up in Arizona and California: delinquencies fell steadily in 2011 and employment in the construction sector remained positive in annual terms for most of last year. Although the rate of new foreclosures remains high , more than 1% , showing a downward trend . The inventory of foreclosures also declined steadily in these states , through the impetus of investor demand and short-term sales . Nevada now start to experience the improvement that has occurred in California and Arizona , but the percentage of total loans in foreclosure is twice that of those two states . However, the improvement of these conditions contrasts sharply with the situation of housing in Florida , which is the worst in the country . Although inventories of foreclosures fell in many states in 2011, increased during the year in Florida, and still above 14 % of total loans , double the rate of inventory Nevada . Therefore, in local markets , inventories of resale homes may well exceed a monthly supply of 16 to 24 months if we include these foreclosures. To the extent that inefficient foreclosure process have hampered the improvement of the market , measures to expedite the completion of the foreclosure process , the transition of the properties to the inventory of own property and connecting with buyers or investors are only remedy to reduce levels of distressed properties .
High oil prices support energy production and exploration : the demand for housing increases in North Dakota While initial declines in these markets have spread to the Midwest , rising energy prices and the strengthening global demand have prompted a new wave of investment in exploration and production of energy in the U.S.. Much of this activity has been concentrated in the center of the country , from Texas and Louisiana to North Dakota and Idaho. Mining and industry support activities have led to advances in the use of these states therefore have experienced the influx of new residents. Economic activity in North Dakota is experiencing a rapid expansion and, therefore , employment in construction has risen 20 % in residential investment and took the lead. This structural change is clearly shown in the following table : between 2007 and 2010 , five of the 10 markets that experienced an increase in total number of households are in Texas. Unlike New York City , where he has been a decline in household property and a transition to the holiday , owned homes rose in metropolitan areas of Texas. Thus, in certain markets where employment is growing , buying a home is attractive given the low current borrowing costs .