Housing Trends: Home Sales Down, Refi Market Weak

February data from CoreLogic covering U.S. housing and mortgage trends shows home sales are down, prices fell rapidly in 2010, and the refinance market is weak due to lack of equity.

Total estimated home sales in 2010 were 3.6 million units, down from 4.1 million units in 2009. (CoreLogic notes this estimate is different from the National Association of Realtors’ data, which indicates sales fell only 5% in 2010.)

Average home prices fell 5.1% in November from the previous year’s November price index, and the discount in price for distressed sales rose to 37% in 2010, up from 26% in 2008 and 30% in 2009, according to CoreLogic.


The report shows 16 months of visible inventory in November, at the highest level since February 2009, compared with “normal” levels of six to seven months of inventory.

In terms of mortgage applications and negative home equity, the refi share of applications was above 70% in December, with more than 50% of outstanding mortgages having rates that are 100 basis points above current rates, thus leading to refinancing. For purchase mortgages, weak demand and tight credit have led to a leveling off for loans. The rate is not expected to increase substantially in 2011, according to CoreLogic.


For owner-occupied purchase originations and loan to value ratios, the two most popular purchase mortgage segments, the 75-85% LTV group and the 95-100% LTV proportion, diverged in terms of growth (see chart above). The 75-85% group fell from 45% of originations in 2005 to the mid teens by 2010. Contrary to that trend, the 95-100% LTV group, which usually receives FHA financing, nearly doubled in proportion, from 12% in 2005 to more than 46% in 2010.

See the full CoreLogic report.

Written by Elizabeth Ecker

Join the Conversation (1)

see all

This is a professional community. Please use discretion when posting a comment.

  • No one has ever accused NAR of being a stickler for accuracy. As usual they have given information that confuses the marketplace (probably hoping to hang on to their sales force). It seems home sales were not down 5% but rather over 10%.

    Even though it is inaccurate, I like the term “visible inventory.” This article substantiates the belief many of us in the industry have concluded. Visible inventory is now log jammed. There will be few sales between now and late spring. Yet there are warnings from forward mortgage servicers that more irreversible defaults will soon be foreclosed and enter the visible inventory category with much, much more to come.

    Carl Shadle stated in a RMD comment on Wednesday the 16th: “At the current PLF’s boomers won’t be in the hunt or have much impact until they are in their ’70’s, which is almost a decade away.” The name of the article is Major investors are here, reverse mortgage customers are coming and was dated February 15, 2011. Even I am not that cynical but he could be right. However, I have no expectation of seeing PLFs returning to anywhere close to their September 30, 2009 levels or ongoing MIP dropping to 0.5% for several years to come.

    While some may feel that 100,000 endorsements are well within reach this fiscal year, others of us feel very differently. HUD seems to have given up on any significant increase in endorsements until at least after the fiscal year ending September 30, 2012. Since the expected FHA Case Number Assignments impacting that fiscal year do not include those assigned after May 31, 2011, one cannot read into these numbers how HUD is viewing Case Number Assignments after that date. Thus HUD could be viewing the summer of 2012 as the return of HECMs but that is nothing more than speculation for now and is not fact.

    What seems true is we cannot expect PLFs to change in the near future unless there is a high volume of Savers with significant balances due so that the MMI reserve for HECMs can build up a positive balance. Remember over one billion dollars had to be transferred out of the reserves of other programs in order to support HECMs last year. The HECM program has yet to support any other program despite the cries of foul we heard twenty-one months ago. The worst story is that new borrowers are supporting the HECMs generated in fiscal 2009 and 2010 through the 0.75% addition to ongoing MIP.

string(92) "https://reversemortgagedaily.com/2011/02/18/housing-trends-home-sales-down-refi-market-weak/"

Share your opinion