This just in: after disappointing March data, new home sales surged in April. The Census Bureau and the Department of Housing and Urban Development reported this week that sales were at a seasonally adjusted annual rate of 619,000. This is an increase of 16.6% from the previous month and 23.8% higher than in April of 2015.
West coast sales in April reported an 18.8% month-over-month increase. This is a 23.6% upward trend for the current calendar year according to The Census Bureau and the Department of Housing and Urban Development. Historically this report has had a significant margin of error, yet this trend is being echoed in every region in the country. Nationwide an estimated 243,000 new homes were for sale at the end of the reporting period. This is an estimated 4.7-month of supply at the current rate of sales, down from 5.5-months in March.
On the other hand, Black Knight Financial Services reported that foreclosure starts dropped a
staggering 17% from prior year last month. The foreclosure process was initiated by that of 58,000+ homes in April, according to Black Knight. The number of properties in presale dipped with more than 36,000 units from March to 595,000, the first time the figure has traveled downward since 2007.
The percentage of mortgages in presale foreclosure inventory was 1.17%, an improvement of 5.9% month-over-month and of 27.8% from a year earlier. Black Knight also said that the monthly prepayment rate slowed to 1.26%, a decrease of 3.24% from March and 7.25% from last April, reflecting a decrease in refinance activity.
“Banks are continuing to work through the backlog of lingering foreclosures, pushing bank repossession numbers higher in the short term even as foreclosure starts drop to new lows,” said Daren Blomquist. “This also means the share of active foreclosures tied to bubble-era loans is shrinking, with 59 percent of all loans in foreclosure originated between 2004 and 2008. While that is still a disproportionate share of active foreclosures, it continues to decrease from 61 percent earlier this year and 75 percent two years ago.”
I would be happy to speak with you about how this new 10-year low in foreclosures and recent surge in home sales might affect you. Feel free to reach out to me at any time.