Housing secretary: Market has 'turned a corner'

Amid mixed housing data and 15-year homeownership low, questions persist. Did the housing market simply turn into another cul-de-sac?

By Tony at MSN Real Estate May 1, 2012 12:36PM

Shaun Donovan, secretary of the Department of Housing and Urban Development, said today that the U.S. housing market has "turned a corner."

 

His comments at a Bloomberg-sponsored conference echoed those of the National Association of Realtors, which said last week that lower inventories may create "more balanced conditions" and a rise in home prices.

 

The most recent housing data show that pending home sales in March — or homes under contract but not yet closed upon — were at their highest level since April 2010, spurring optimism for more closings in coming months. Sales of existing homes were up 5.2% from March 2011, and new-home sales were up 7.5% in that time. Zillow and the S&P/Case-Shiller Home Price Index also reported new post-boom price bottoms in their latest reports.

 

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According to The Fiscal Times, Donovan preferred to take a wider view, looking at a decrease in foreclosure activity as evidence that housing-market stabilization may be upon us:

 

"We have made real progress over the past three years. The number of families falling into foreclosure  is down by more than half from where it was,” he said. “So there is real progress and I think we have turned a corner."

 

© SuperstockHis comments come a day after CoreLogic reported a 6% decrease in foreclosure inventory between March 2011 and this past March. CoreLogic says 3.4% of U.S. homes were in some stage of foreclosure in March, down a tad from 3.5% in March 2011. Most of the decrease came from states such as Arizona, California and Nevada, where foreclosures can be completed outside of court. Those three states also have been called foreclosure hotbeds since the housing downturn began.

Still figuring into the tricky foreclosure situation is the impact of banks' shadow inventory — would-be foreclosure properties that are not necessarily reported as part of this data. Although more have trickled into the pipeline, their impact could obscure the meaning of similar foreclosure data for months to come.

 

Then there's the matter of affordability. Yesterday, the Census Bureau reported that the homeownership rate for the first quarter of this year was 65.4%, the lowest since early 1997. Year to year, homeownership declined among households earning less than the U.S. median income as well as above it, according to The Associated Press.

So what corner did the housing market turn, exactly? Hopefully, not one it has circled for the past four years.

 

In more Donovan news: Last week, he told the Senate Banking Committee that he did not expect changes in Fannie Mae and Freddie Mac in the next few weeks, Bloomberg reported. The government seized control of the mortgage-securitization giants in 2008, and calls for their dissolution have persisted since.

Donovan also spoke out last week about rumors that Republican presidential candidate Mitt Romney would shutter HUD. Romney's father, George, held Donovan's position from 1969 to 1973.

 

— Tony Stasiek is a producer/editor at MSN Real Estate.

 

 
11Comments
May 9, 2012 5:52AM
May 7, 2012 8:53AM
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These changes that appear positive are just little breezes in the midst of the same old storm.
We need jobs,  business development,  income.
Get it?
All this wishful thinking isn't going to somehow release a lot of pent-up demand and saved dollars.  The middle class has been completely looted.

May 7, 2012 5:25AM
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MIKE ANDREWS IS RIGHT. EACH STORY THAT COMES OUT ABOUT REAL ESTATE GETS MORE MURKY. ONE GROUPWILL SAY THE RECOVERY IS STILL WEAK , WHICH SEEMS TO BE CORRECT. THEN ANOTHER, SPECIFICALLY THE NATIONAL ASSOCIATION OF REALTORS WILL SAY ITS GREAT. IN DEC OF 2011, AN MSNBC ARTICLE TITLED, ITS OFFICIAL ;HOUSING MARKET WAS SICKER THAN WE THOUGHT IT IS POIINTED OUT THAT THE NAR OVERSTATED THE PACE OF EXISTING HOME SALES BY 16 PERCENT. WHY WOULDNT THEY,  GIVE A FALSE SENSE OF SECURITY THAT ALL IS WELL AND NOT AS BAD TO GET PEOPLE TO BUY . AFTER ALL THEY ARE IN THE BUSINESS TO MAKE MONEY, EVEN IF MISINFORMATION LEADS SOME TO BUY WHO MIGHT NOT BE ABLE TO KEEP UP WITH THEIR  MORTGAGE PAYMENTS.  LET HISTORY REPEAT ITSELF SO FURTHER DOWN THE ROAD THERE ARE MORE FORECLOSURES?. THERE IS INDICATIONS THAT SALES HAVE PICKED UP SOMEWHAT,POSSIBLY ATTRIBUTED TO A COMBINATION OF LOW PRICES ATTRACTING INVESTORS, THE EARLY WARMER WEATHER , AND SOME PEOPLE TGHAT FORESTALLED BUYING DURING THE EARLIER PART OF THE ECONOMIC DOWNTURN. HOWEVER TERMS LIKE TURNING A CORNER AND REAL PROGRESS ARE ALL ASSMOKE BEING BLOWN IN LIGHT OF THAT HOME OWNERSHIP IS AT ITS LOWEST SINCE 1997.EVEN THIS ARTICLE CONTRADICTS WHAT THESE IMBECILES ARE CLAIMING.
May 7, 2012 5:20AM
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I hate being a wet blanket at this picnic but a dose of reality is needed. Nothing is going to be sustained until the job market recovers. I do not know what part of that the Obama Administration does not understand about it. There can be no jobless recovery in the economy, and I have vocally expressed this as many Americans have over the past few years. Common sense says if people are not working they are not buying. This includes houses, cars, and other non-essential services and goods. This recovery will probably be explosive once the jobs issue is solved. Pent up demand will have people buying like nobody's business once they get some disposable income. Even Joe Biden yesterday used the old line of "How does the government create jobs?" like it is something not possible. Oh, he is quick to say giving tax breaks to the rich only makes them richer but we know that's a cop out. Specific job creating legislation can be targeted to job creation and can get people to work. If Joe Biden does not get it then step back and let Mitt Romney show you how it is done.
May 7, 2012 4:26AM
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The Housing Market Report is a lot like the weather reports.  Stick around because in five minutes, it's going to change to something completely different.
May 7, 2012 3:24AM
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It's always getting  better.  As a realtor before I retired, we could always find the silver lining no matter what the market conditions indicated.  I would have to wonder what this "housing secretary" is able to figure out from his plush chair behind a desk.  Like "usual suspects" said, "It's either going to go up or down."  Most days you can find both views in the same business section of your paper.

Have a nice day!   Smile

May 7, 2012 2:33AM
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hey Mike Andrews thats because they are trying to push the view that things are getting better wether they are or not
May 7, 2012 2:32AM
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wow   after an article about  the pain and hope of a healthy housing rebound ends in the moral of the story is "How many times can your house fit in 1 Romney house"

so are you going after stoking the envy-vote for this sitting President

May 2, 2012 11:16AM
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It's going to go up or down. I'm generally right.
May 2, 2012 7:38AM
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I read a different view of the housing market every single day. First the market is headed for a death spiral. Then the market is recovering. Then this could be the best real estate market in five years. Then the housing market is doomed. It's just gotten ridiculous to the point where people should stop making statements about the market altogether.

I wrote about this on my blog a couple weeks ago (http://blog.realestatemike.com/2012/04/24/the-truth-about-the-real-estate-market.aspx) and since then it's just gotten more and more confusing. I really wish people would stop trying to confuse people with their conflicting opinions.

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