Here’s another good sign the housing market is continuing to strengthen – sales of distressed homes are at their lowest level in eight years.
CoreLogic’s most recent findings show that sales of REO properties (real estate owned by banks) accounted for just 11.1% of total home sales in April. That’s down 3 percentage points since April 2014, and shows a 1.5% improvement since March of this year.
At their peak in 2009, distressed home sales accounted for 32.4% of total home sales, with 27.9% of them representing REO sales.
Breaking the April total home sales stats down further, REO sales made up for 7.4%, and short sales accounted for 3.7%. In mid-2014, short sales finally fell below 4% and have stayed stable since then.
According to the CoreLogic report, the steady move away from REO sales is a driver of improving home prices because REO properties normally sell at a bigger discount than short sales. The level of distressed sales pre-crisis remained steady at about 2%, and if this year-over-year decrease continues, it’s possible the distressed sales share could reach that mark again by the 2nd quarter of 2017.
This Week’s Mortgage Rate Summary:
- Rates Currently Trending: HIGHER
- Weekly Rate Forecast: NEUTRAL
- This Week’s Potential Volatility: HIGH
There’s both optimism and volatility to consider in the mortgage market; so it’s important to know the risks and benefits of floating your loan rate or locking your rate. Discuss it with your mortgage professional today.