The glass continues to be half-full and half-empty for the U.S. housing market.
Many recent home sales data points have not just come in positive, but showed the best performance in years. Meanwhile, mortgage rates keep hitting historic lows enticing home buyers. At the same time, Warren Buffett noted in discussing the housing rebound with CNBC on Thursday morning that the progress made is off a very low base.
Indeed, as home prices and home sales have risen, so have foreclosures, according to a mid-year foreclosure report from RealtyTrac.com.
But first, the latest good news. Clear Capital reports this week that U.S. home prices are on the rise, especially in the West and Midwest.
Home prices are, for the first time in recent memory, up in all U.S. regions, ranging from 3.5% in the West to 0.8% in the Northeast. All told, U.S. housing prices are, on average, up 1.7% for the year.
Perhaps even better news is Clear Capital’s outlook for the rest of the year.
“June home price trends provided further evidence that housing has turned the corner, with the momentum of the recovery picking up speed,” said Dr. Alex Villacorta director of research and analytics at Clear Capital in a release. “Looking forward over the rest of 2012, we expect to see national, regional, and most metro markets improve by varying degrees. And while it’s encouraging to see broad-based advancements coupled with positive forecasts, we remain cautiously optimistic.”
“The current strength in housing fundamentals remains vulnerable to domestic and global economic challenges,” Villacorta adds. “But right now the market is the strongest it’s been since the start of the downturn, and barring a major economic meltdown, we expect to see this organic growth sustain and strengthen through the end of the year.”
One troubling trend in housing comes from the foreclosure market, which once again is trending upward, after months of steady decline.
Data from RealtyTrac.com shows that U.S. foreclosures are up 2% over the past six months, although foreclosures are still down 11% from the first six months of 2011.
In its Mid-Year 2012 Foreclosure Market Report, RealtyTrac says that one in 126 U.S. homes went into foreclosure in the first half of 2012, with 1,045,801 total foreclosures across the country during that time period.
Regionally, foreclosure increases hit some states particularly hard (as follows):
All told, 31 states posted foreclosure gains in the 2nd quarter of 2012, with 311,000 properties entering the foreclosure process during the quarter. RealtyTrac says that’s a 9% hike from the 1st quarter of 2012, and a 6% from the 2nd quarter of 2011 — the first upward spike in foreclosures on a year-to-year basis since 2009.
On a monthly basis, June saw an 18% increase in California-based foreclosures, the highest rate in the U.S., RealtyTrac reports. That was the first month the Golden State led the nation in foreclosures since 2005.
By most measures, especially long-term ones, foreclosures seem to be stabilizing. But the RealtyTrac numbers are a fresh reminder that the housing market isn’t out of the woods yet.
“Additional scrutiny on how lenders and servicers process foreclosures, along with aggressive foreclosure prevention efforts by the federal government and several state governments, continue to keep a lid on the foreclosure problem at a national level,” explained Brandon Moore, CEO of RealtyTrac, in a release.
“Still, foreclosure starts began boiling over in more markets in the first half of the year, particularly in the second quarter, when rising foreclosure starts spread from primarily judicial foreclosure states in the first quarter to more than half of all non-judicial foreclosure states in the second quarter.
The increases in foreclosure starts in the first half of the year will likely translate into more short sales and bank repossessions in the second half of the year and into next year, RealtyTrac concludes.
An optimist might say that one out of two stats being positive in housing isn’t bad — it’s certainly a better picture for housing now than in 2008 or 2010, for example.
“It doesn’t amount to a whole lot yet, but it’s getting better,” Buffett told CNBC on Thursday.
But keep an eye on those foreclosures. A steady rise in those will surely crimp home prices, at least in the short term.