| Foreclosure sales still pummeling home prices and Home sales worse than thought |
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A whopping 46% of homes sold in November were either short sales or REOs -- as homes repossessed by lenders are called, according to a survey by Campbell/Inside Mortgage Finance. One problem: Distressed homes sell for a lot less than homes sold by conventional sellers. The average price for a short sale (when borrowers owe the bank more than their homes are worth) was $209,000 in November. For a regular sale, the average was about $259,000.The numbers are even worse for REOs, which averaged about $190,000 for properties in move-in condition.For a damaged REO, the price was just $99,000. That's a common problem, since homeowners who've been foreclosed on don't typically devote resources to upkeep.There is no shortage of distressed properties: More than 6 million borrowers are delinquent 30 or more days, according to LPS Applied Analytics. Two million are already in the foreclosure process, and most of these homes will be repossessed or sold as short sales. [Read the full article] Mortgage rates have hit record lows, with the interest rate on a 30-year, fixed-rate loan, the most popular choice of homebuyers, averaging 3.91% this week, according to Freddie Mac's Primary Mortgage Market Survey.Rates have fallen 0.9% since the beginning of the year. For a homeowner with a $200,000 mortgage, that means a savings of $1,200 a year, said Frank Nothaft, Freddie's chief economist.With rates at or below 4% for the last eight weeks, home sales are getting a boost, Nothaft added. Existing homes sold at their fastest pace since January last month, according to the National Association of Realtors, and new home sales edged higher in November as well.Meanwhile, rates for 15-year mortgages remained unchanged, matching last week's record low of 3.21%."We've entered the holiday lull with nothing much happening to change rates one way or the other," said Greg McBride, senior financial analyst for Bankrate.com. [Read the full article] That was up 1.6% compared with the revised October rate of 310,000 and 9.8% higher than November 2010.The good news followed other recent positive industry reports. November sales of existing homes rose 12% year-over-year; homebuilding spiked nearly 21% compared with 12 months ago; and mortgage rates hit record lows this week.The sales hike was in line with expectations: The forecast from Briefing.com was for a 315,000 annualized rate.The median price for a new home was $214,100 in November. Inventory shrank to 158,000 units, a 6-month supply at the current sales rate.New homes sales are particularly important because they have a large impact on the overall economy, said Bob Denk, senior economist with the National Association of Home Builders."Inventories of new homes are very low: There's nothing on the shelf, so any increase in new home sales will translate directly into new housing starts," he said. [Read the full article] 
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