Double-digit gains in home sales, declining foreclosures and strong home equity growth in May are signaling a healthy housing recovery is underway, according to the June edition of the Obama Administration’s Housing Scorecard.
Released Thursday by the Department of Housing and Urban Development (HUD) in conjunction with the U.S. Treasury, the June Scorecard records the progress of the nations housing market from the prior month across several areas. So far, May was a progressive month for housing on various fronts.
Purchases of new homes surged 18.6% in May with 504,000 new home sales, following 425,000 in April—the biggest monthly gain since January 1992, and the highest level since May 2008, according to data from HUD and the U.S. Census Bureau. Annually, home sales were up 16.9% compared to May 2013.
Sales of existing homes also reported significant profess after a lackluster performance in the previous two quarters.
Existing homes—including single-famly homes, townhomes, condominiums and cooperatives—sold at a pace of 4.89 million in May, a 4.9% increase from April, according to data from the National Association of Realtors cited by HUD. Though sales were up on a monthly basis, they remain 5% below the 5.15 million pace recorded a year-earlier.
In another indication showing housing’s marked progress, foreclosure starts continued their downward trend in May. During the month, lenders started the public foreclosure process on 49,240 U.S. properties, down 10% from April and 32% lower from their year-ago level. Additionally, the Scorecard notes that foreclosure starts in May were the lowest seen since December 2005—a 101-month low.
May also saw its number of foreclosure completions dwindle as well, with lenders completing the foreclosure process on 28,373 U.S. properties, down 6% from April and down 27% from one year ago to the lowest level since July 2007—an 82-month low.
It is important to note, however, that bank repossessions were up from a year ago in 14 states, HUD notes.
Homeowners’ equity also posted record-high progress not seen since 2007, rising nearly $795 billion in the first quarter of 2014 and reaching more than $10.8 trillion—its highest since the second quarter of 2007, according to the Federal Reserve.
Since the beginning of 2012, homeowners’ equity has risen sharply with equity up 73%, or nearly $4.6 trillion through the first quarter of 2014.
Although the June Scorecard shows there has been overall positive trends in the housing market thus far, more work needs to be done as the economy continues to recover from the Great Recession.
“Sales of new and existing homes are up, equity continues to grow, and foreclosures starts to continue trending down,” stated HUD Assistant Secretary for Policy Development and Research Katherine O’Regan. “While these are all signs of a healthy recovery, given the severity of the housing crisis, we must stay committed to helping homeowners.”
View the June Housing Scorecard.
Written by Jason Oliva