Foreclosures Drop to Lowest Level Since 2008

By Taff Weinstein at

Foreclosures Drop to Lowest Level Since 2008

According to ATTOM Data Solutions, U.S. properties with a foreclosure filing during the first quarter of 2019, were down 23 percent from the previous quarter and down 15 percent from a year ago to the lowest level since Q1 2008.

“While some markets saw a slight uptick in foreclosure filings, that is above pre-recession levels, the majority of the major markets are well below pre-recession levels,” said Todd Teta, chief product officer at ATTOM Data Solutions. “While we did see a slight increase in U.S. foreclosure starts from last quarter, bank repossessions reached an all-time low in the first quarter of 2019, showing continuing signs of a strong housing market.”

Markets below pre-recession levels include San Jose, Memphis, Dallas-Fort Worth
The 132 out of the 220 markets (60 percent) with a population greater than 200,000 in the first quarter foreclosure activity below pre-recession averages included San Jose (79 percent below); Memphis (77 percent below); Dallas-Fort Worth (77 percent below); Las Vegas (74 percent below); and Phoenix (68 percent below).

Other major markets with first quarter foreclosure activity below pre-recession averages were San Francisco, Riverside-San Bernardino in Southern California, Chicago, Detroit and Seattle.

Bank repossessions down in 48 states and DC
Lenders repossessed 35,787 U.S. properties through foreclosure (REO) in Q1 2019, down 21 percent from the previous quarter and down 45 percent from a year ago — the 14th consecutive quarter with a year-over-year decrease in U.S. REOs.

Along with the District of Columbia, 48 states posted year-over-year decreases in REOs in the first quarter, including Arizona (down 77 percent); California (down 41 percent); Florida (down 33 percent); New Jersey (down 59 percent); and Texas (down 43 percent).

Source: ATTOM Data

What Happened to Rates Last Week?

Mortgage backed securities (FNMA 4.00 MBS) lost -34 basis points (BPS) from last Friday's close which caused fixed mortgage rates to move higher compared to the previous week.

Overview:  Mortgage rates moved a little higher last week on the heels of inflationary data that was a smidge hotter than expected and on growing optimism of a trade deal with China moving forward.

Inflation Nation:  The March Import Prices were much higher than expected with the MOM at 0.6% vs est of 0.4% and Feb revised upward from 0.6% to 1.0%. YOY Import Prices came in at 0.0% but that is a huge beat considering the estimates called for a decline of -1.3%.  The majority of the increase is attributed to energy costs. The March Producer Price Index (PPI) was a littler hotter than expected.  The Headline PPI YOY moved upward from 1.9% in Feb to 2.2% in March, the market was pricing in another 1.9% reading.  The Core PPI YoY remained at 2.4%. (PPI) was a littler hotter than expected.  The Headline PPI YOY moved upward from 1.9% in Feb to 2.2% in March, the market was pricing in another 1.9% reading.  The Core PPI YoY remained at 2.4%. The March Consumer Price Index (CPI) was a mixed bag.  The Headline CPI YOY moved upward from 1.5% in Feb to 1.9% in March, which is a large move.   However, it was largely expected with expectations in the 1.8% rang.  Meanwhile the Core (Ex Food and Energy) CPI YOY hit 2.0% vs est of 2.1%.

Jobs, Jobs, Jobs:  The February Job Openings and Labor Turnover Survey (JOLTS) continued to show very high levels of unfilled jobs and once again topped 7 million.   It was lighter than expectations (7.087M vs est of 7.550M) but January was revised upward from 7.581M to 7.625M which is a new and all time high record.

The Talking Fed: We got the Minutes from the last FOMC meeting where they seemed to tilt more to the "dovish" side of policy on Wednesday.  You can read the official release here.
Here some key takeaways:

  • *FED MAJORITY SAW RISKS WARRANTING RATES ON HOLD THROUGH 2019
  • *SOME FED OFFICIALS SAW FURTHER MODEST INCREASE LATER THIS YEAR
  • *FED OFFICIALS SAW `SIGNIFICANT UNCERTAINTIES' AROUND OUTLOOK
  • *SEVERAL FED OFFICIALS CONCERNED YIELD CURVE WAS QUITE FLAT
  • *SEVERAL FED OFFICIALS POINTED TO INCREASED DEBT, LEVERAGE
Central Bank Palooza: The European Central Bank kept their main interest rate at 0.0% and announced no real policy changes.  They did say that they would keep rates the same throughout 2019.

 

What to Watch Out For This Week:


The above are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises.

It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets.  Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upo

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