photo credit: Springs Summit Group
In the spring of 2011, foreclosures made up about one-third of all home sales in the United States, representing a growth of six times the foreclosure percentage of a "healthy housing market." At the end of August 2011, fixed mortgage rates grew a bit from their lowest levels in years. RealtyTrac reported that 31 percent of the market during the April-June quarter was made up of foreclosure sales. RealtyTrac senior vice president Rick Charga explained, "Over 60 percent of homebuyers are looking for a property thats in foreclosure, and so the buyers really know that there are bargains out there to be had." Charga went on to explain, "the more sales the better;" banks need to keep unloading the enormous amount of foreclosure properties they have on their books. Once these foreclosures are sold, it should help housing prices to climb back up a bit, Charga clarified. Were it not for the governments investigation into some lenders shoddy paperwork practices, foreclosure sales would have been even higher this past spring. This investigation has forced several lending institutions to delay sales stemming from foreclosures. Of course, after the investigation is complete, its quite possible that foreclosures will sky-rocket later in 2011.
At Augusts close, Freddie Mac reported the average rate on a 30-year fixed mortgage had risen to 4.22 the lowest level since 1971. Rates on a 15-year fixed mortgage, a favored option for refinances, rose to 3.44 percent. Low mortgage rates havent done enough to bring the housing market back up to a healthy level, though. By the end of August of this year, the number of mortgage applications had fallen to their lowest point in 15 years according to the Mortgage Bankers Association. RealtyTrac reported that the average bank-owned home sold for 40 percent less than the average price of other homes. That number has grown four percent since last quarter and 34 percent from the same quarter in 2010. The average price of a foreclosed property was down less than one percent from the January-March quarter and almost five percent from the April-June quarter of 2010, according to RealtyTrac. Colorados foreclosure sales made up at least a third of all home sales in the first quarter of 2011.
