HUD REO Inventory Double That Of Last Year
May 10th, 2011
A report from HUD indicates that the Federal Housing Administration (FHA) is holding nearly 25,000 more properties now than it did this time last year[1]. In February 2010, the FHA had an REO tally of 44,605. Now the number logs in at 68,801. Although last June the homebuyer tax credit spurred sales of REO properties to a high of 8,893 homes, the agency’s REO sales have slid since that time, logging in at around 6,000 in November and plummeting to 2,632 in January of this year.
While these numbers are not particularly promising – a 54.2 percent jump in real estate owned seldom is – experts point out that “it is not unexpected for anyone following shadow inventory numbers”[2]. New reports from the Mortgage Bankers Association (MBA), for example, put a full housing recovery as far off as three or four more years in light of the shadow inventory, and MBA vice president of research and economics Michael Fratantoni adds that “we are going to see different housing market recoveries” in different areas of the market thanks to economically viable areas of the country like Texas and Washington D.C. stabilizing far sooner than areas that are “paralyzed” by high unemployment and looming shadow inventories[3].
While this is definitely not good news in the short term, do you think that it is promising that finally the “looming” shadow inventory is starting to become visible?
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[1] http://www.dsnews.com/articles/huds-inventory-of-reos-more-than-double-year-ago-2011-05-06
[2] http://www.mortgagenewsdaily.com/channels/pipelinepress/05052011-mortgageit-mortgage-deutsche.aspx
[3] http://www.housingwire.com/2011/05/03/shadow-inventory-will-keep-housing-recovery-at-bay-for-three-to-four-years
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