The housing market had a number of notable improvements during the first three months of 2012, but some analysts believe unstable property values will continue to pose as an obstacle in the future.
According to President Barack Obama and his administration's Housing Scorecard for April, during the first three months of the year, there have been significant improvements in the national mortgage delinquency rate as well as increased home sales. But the value of these homes will create uncertainty among both buyers and sellers as the market enters the spring and summer months.
Home sales surge
Specifically, the report found that existing-home sales rose 5.3 percent in the first quarter from a year earlier to an estimated 373,300 transactions. Meanwhile, there were roughly 27,300 new-home sales during the same three-month period.
As a result of the increased sales rate, the national home inventory thinned to the lowest level recorded in years. At the current sales pace, the inventory has enough stock to provide a 5.3-month supply of new homes and a 6.3-month supply of existing homes. Real estate data indicates that a housing market with at least a six-month inventory represents a balanced marketplace.
Additionally, as the financial situations of a number of current homeowners improved, so did the mortgage delinquency rate. According to the report, borrowers had a delinquency rate of just 3.8 percent during the first quarter. This is a major improvement from a year earlier when mortgage records show the rate was 4.2 percent. A number of analysts believe government initiatives, such as the Home Affordable Refinance Program and the Home Affordable Modification Program, contributed to the decline.
"We're making important progress in providing relief to homeowners under the Obama Administration's programs," said Department of Housing and Urban Development assistant secretary Raphael Bostic. "With fewer borrowers falling behind on their mortgages and almost half a million families taking advantage of our enhanced Home Affordable Refinance Program - standing to save on average $2,500 per year - it's clear that the Administration’s efforts continue to provide significant positive benefits."
More work to be done
However, despite the assistance provided so far in the wake of the housing market collapse, Bostic noted that there is still more to be done to help struggling homeowners currently being threatened by looming foreclosure. He called on Congress to pass legislation that would allocate even more funds to these borrowers and provide them financial relief.