The Office of Economic Policy

May 17, 2016

The housing recovery continues to support broader economic activity. Residential investment

rose at an annual rate of 15 percent in 2016Q1, contributing 0.5 percentage point to GDP 

growth. Meanwhile, residential construction employment has continued to rise steadily. 

Single-family housing starts appear to remain on a gradual uptrend, but multifamily starts have 

pulled back somewhat from the strong levels seen in the first half of last year. 

National home price appreciation has moderated—from a double-digit pace in late 2013 and 

early 2014 to a more sustainable mid-single-digit pace now. That said, home price valuations 

look to be somewhat elevated relative to pre-bubble norms. Housing affordability for the 

typical family has diminished considerably because of the rebound in home prices but remains 

high by historical standards because of very low mortgage rates.

Although some mortgage borrowers continue to struggle in the wake of the crisis, delinquency 

and foreclosure rates are closing in on their pre-crisis ranges. The number of distressed sales

continues to drop, and the number of underwater borrowers is down by nearly two-thirds since 

2011.

This month’s dashboard includes a special topic that explores housing supply conditions in the 

United States, including the availability of homes for sale and how supply conditions appear to 

be affecting different geographies and market segments. 

HOUSING DASHBOARD
1

May 2016

Pre-bubble 

norm 

(2000-2002 

average) Trough

Current 

level

Current level 

versus prebubble norm 

(2000-2002 

average)

New 921 270 511 8.5% -44.5%

Feb-11 Mar-16

Existing 4,779 3,060 4,760 6.1% -0.4%

Jul-10 Mar-16

New 311 142 246 2 1 -65

Jul-12 Mar-16 thousands thousands

Existing 1,836 1,550 1,740 -47 -96

Dec-15 Mar-16 thousands thousands

Housing starts 1,289 353 778 13.4% -39.6%

Mar-09 Apr-16

Building permits 1,257 337 736 9.9% -41.5%

Jan-09 Apr-16

115.7 137.3 190.0 5.4% 64.2%

Nov-11 Mar-16

Inflation-Adjusted 111.6 101.9 139.3 6.3% 24.8%

CoreLogic HPI Nov-11 Mar-16

Housing affordability 127 101.1 169.3 -2.6% 33.7%

Jul-06 Mar-16

5 9 8 5 8 5 -1

Jan-09 May-16 point(s) point(s)

152 117 156 -3 4

Oct-08 May-16 point(s) point(s)

1,113 100 541 -261 -572

2008-Q4 2016-Q1 thousands thousands

67.7 63.5 63.6 -0.6 -4.1

2015-Q2 2016-Q1 percentage point(s) percentage point(s)

Inventory of homes 

available for sale 

(thousands)

Construction activity 

(thousands)

Weakened

Weakened

Household formation 

(thousands)

Homeownership rate 

(percent)

Homebuilder 

(NAHB, over 50 means majority view conditions 

positively)

Home-buying conditions 

(Reuters/Umich, index = good time - bad time + 100)

CoreLogic HPI 

Prices 

(index, Jan 2000 = 100)

Improved

Sentiment

Demographics

Improved

Weakened

(NAR, index=100 when median family income qualifies 

for 80% LTV mortgage on a median priced home)

Housing Market Flash

Tuesday, May 17, 2016

Improved

Improved

Current 12-month 

average versus yearearlier value

Single-family homes

Sales 

(thousands)

Weakened

Improved

Weakened

Improved

Improved

Improved

Housing Market Flash
2

May 2016

Since 2012, the inventory of unsold 

single-family homes has been 9 to 

13 percent below its pre-bubble average.

This shortfall mostly owes to fewer existing 

homes for sale, which typically make up the 

bulk of sales inventories. In 2015, the total 

number of unsold homes sat at 1.8 million, 

the second lowest it has been in 22 years.

The current low level of the inventory to 

sales ratio is also suggestive of a low 

supply of homes for sale. In a balanced 

housing market, where the supply of homes 

for sale is sufficient to meet the implied

demand for homes given by demographics 

and demolitions, it typically takes six to 

seven months to exhaust the available 

inventory of homes for sale. During the 

housing crisis, housing supply expanded 

and sales volume declined, increasing the 

inventory to sales ratio to a peak of 8.7 in 

2008. By 2015, the ratio fell to 4.2, below its 

pre-bubble average.

The number of homes for sale as a percent 

of the number of households remains 

below pre-bubble levels. During the late 

1990s and early 2000s, there were around 2 to 

2.5 homes for sale for every 100 households. 

This figure increased to nearly 4 homes for 

sale per 100 households during the housing 

bubble. In more recent years, this figure has

dropped to below 2 homes per hundred 

households.

Homes-for-Sale Inventory as a Percent of 

Households

Special Topic: Housing Supply Conditions

Source: CoreLogic.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

New Homes Existing Homes

Average 1990 - 2003

Unsold Single Family Homes Millions of units

Source: National Association of Realtors, Census Bureau, Haver Analytics & Treasury calculations.

0

2

4

6

8

10

'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

Average 1990 - 2003

Single Family Home Inventory-to-Sales Ratio

Source: National Association of Realtors and Census Bureau.
3

May 2016

Housing vacancies are down to 

1.9 percent, approaching their prebubble average of 1.6 percent. The 

vacancy rate measures the number of

vacant homes for sale as a percent of the

housing stock that could be owneroccupied. Lower rates of housing vacancies 

indicate a tighter housing market, as there 

are fewer homes on the market as a 

proportion of the total housing stock.

Housing vacancies vary considerably by state. Among those with low vacancies, shaded in light 

blue, many are western states like Utah, South Dakota, and Wyoming that were less affected by the 

housing crisis and have had consistently low vacancies over the past ten years. Other states with low 

vacancies include North Dakota and Texas, where net migration has been positive due to the oil and 

gas boom. States with high vacancy rates include New Jersey and Florida, where the foreclosure 

inventory remains elevated due to delays in processing foreclosures. 

Housing Vacancies by State, 2015Q4

Source: Census Bureau. AK vacancy rate 2.3, HI vacancy rate 1.4.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

Percent

Average 1990 - 2003

Housing Vacancies

Source: Census Bureau

Special Topic: Housing Supply Conditions
4

May 2016

The size of newly built homes has changed in 

recent years, with the construction of smaller 

homes lagging behind historical levels.

Before 2003, homes less than 1600 square feet, 

typically considered starter homes, accounted 

for around 30-40 percent of the market, while 

homes greater than 3000 square feet were 

around 15 percent. Since 2011, 30 percent of 

newly-built units have been large homes, while 

the starter market share has been just 15 

percent. Damped construction of smaller units

is limiting starter home availability for first-time 

homebuyers.

Price increases have been strongest for homes 

priced below the median, reflecting in part the 

slowdown in new construction of starter homes. 

Since the recession, the least expensive homes (less 

than 25 percent of the median home price) have 

seen prices rebound more than 50 percent (gray 

bars) through January 2016, compared with just 

under 30 percent for homes priced more than 25 

percent above the median. In the year ending 

January 2016, the least-expensive homes posted 10 

percent price gains (red bars) versus 4 percent for 

the most expensive homes. 

Restrictive land-use regulation is one explanation 

for why the supply of starter homes has lagged. 

Typically, rising prices signal to builders that new 

construction is likely to be profitable. However, 

restrictive land-use regulations discourage building 

and tilt construction in favor of more expensive 

homes, both of which worsen affordability. With 

rising housing costs, more adults are likely to share 

their home with family or friends. Compared to 2011, 

the number of adults per household in 2014 rose by 

slightly more in cities with more restrictive regulations. 

Source: CoreLogic.

Source: Calculated Risk and Census Bureau.

Cumulative Price Growth Through January 2016 

by Price Tier

Special Topic: Housing Supply Conditions

1.99

2.04

2.09

2.07

2.03

2.09

2.14 2.13

1.9

2.0

2.1

2.2

Least restrictive Less restrictive More restrictive Most restrictive

Land Use Restrictions and Number of Adults per Household

2011 2014 2011 2014 2011 2014 2011 2014 

Source: Zillow
5

May 2016

Residential investment continues to 

support GDP growth. Residential

investment rose at an annual rate of 

15 percent in 2016Q1, adding

0.5 percentage point to real GDP growth, 

surpassing the 0.3 percentage point 

average contribution over the previous four 

quarters. (The recent flatness in housing 

starts will take some time to be reflected in 

residential investment because of the lags 

associated with construction.)

Employment in residential construction 

continues to recover. Over the past year,

it has increased by 11,700 jobs per month, 

compared with 12,500 jobs per month in 

the year-earlier period. The level of 

employment remains relatively low: 

residential construction employment 

totaled just under 2.6 million workers in 

2016Q1, accounting for roughly 2.1 percent 

of total private payroll employment, 

compared with around 2.6 percent in the 

early 2000s. 

Housing wealth is nearing its earlier 

peak. The value of household real estate 

reached $22.0 trillion in 2015Q4, up from a 

low of $16.2 trillion in 2011Q4. The current 

level is close to its 2006Q4 peak, but the

sustainable level is higher than in 2006 

because of population-driven growth in the 

housing stock and overall inflation. 

Housing’s Importance to the Economy

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

'00 '02 '04 '06 '08 '10 '12 '14

GDP (% Change, Annual Rate)

Residential Investment's Contribution

Percent

Residential Investment's Contribution to 

Real GDP 

Source: Bureau of Economic Analysis 

25

35

45

55

65

75

0

5

10

15

20

25

'00 '02 '04 '06 '08 '12 '14 '16

Market Value of Real Estate (left scale) Net Equity (left scale)

Equity's Share of Value (right scale)

Household Real Estate and Net Equity

Trillions Percent 

Source: Federal Reserve Board 

1.5

2.0

2.5

3.0

3.5

4.0

1.5

2.0

2.5

3.0

3.5

4.0

'02 '04 '06 '08 '10 '12 '14 '16

Number Employed (left scale)

Share of Total Private Employment (right scale)

Millions Percent

Employment in Residential Construction 

Note: Includes those employed directly in residential construction as well as related 

specialty trades.

Source: Bureau of Labor Statistics 
6

May 2016

Since last summer, housing starts have 

been about flat, as further increases in 

single-family starts have about offset a 

pullback in multifamily starts. Singlefamily starts (light blue line) rebounded in

April, and appear to be on a gradual

uptrend. Multifamily starts (black line) 

surged in the first half of 2015 but have 

since moderated. 

Builder confidence remained upbeat in 

May. The National Association of 

Homebuilders index has recorded readings 

above 50 (meaning a majority of builders 

view the market positively) for the last 

23 months. All three of the index’s 

components—sales expectations over the 

next six months, current sales, and buyer 

traffic—are above their 2014 averages.

The inventory of homes for sale remains 

well below historical averages. The stock 

of existing homes for sale (dark blue line) 

was at 1.98 million units at the end of

March, up from 1.76 million in December, 

which was the lowest level since December

1999. The stock of new homes for sale 

(light blue line) was at a 71⁄2-year high of 

246,000. At the current sales pace, there is 

4.5-month supply of existing homes 

available for sale; for new homes, the 

available inventory is equivalent to a 

5.8-month supply.

Housing Starts and Inventories

0

100

200

300

400

500

600

700

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

'02 '04 '06 '08 '10 '12 '14 '16 Millions Millions Unsold Homes Thousands

Source: National Association of Realtors and U.S. Census Bureau 

Existing (left scale)

New (right scale)

Series average

Series average

0

10

20

30

40

50

60

70

80

'00 '02 '04 '06 '08 '10 '12 '14 '16

Source: National Association of Homebuilders 

Builder Confidence Index

0.0

0.3

0.5

0.8

1.0

1.3

1.5

1.8

2.0

'00 '02 '04 '06 '08 '10 '12 '14 '16

Single-Family Starts

Single-Family Permits Multifamily Starts Multifamily Permits

Source: U.S. Census Bureau 

Millions

Starts and Permits 
7

May 2016

Mortgage interest rates remain very low 

by historical standards. The average 

interest rate on new 30-year fixed-rate 

conventional mortgages settled at a threeyear low of 3.57 percent in the week ending 

May 12. The current rate is only 26 basis 

points higher than the lowest rate recorded 

in 2012.

The National Association of Realtors 

Housing Affordability Index suggests that 

housing remains affordable for the typical 

family. Affordability has diminished 

considerably since 2013 as home prices have 

risen, but has stabilized recently due to 

relatively low mortgage rates. (Note that the 

index assumes a 20 percent down payment; 

interest rates would be higher and 

affordability would be lower for a family that 

made a smaller down payment).

Households remain positive about home 

buying conditions. The University of 

Michigan Consumer Survey’s “Good Time to 

Buy” Index remained slightly higher than 

the long-term average in mid-May. Low 

interest rates continue to be the main factor 

cited when respondents were asked why 

home-buying conditions are good.

Underpinnings of Housing Demand

80

100

120

140

160

180

200

220

240

'00 '02 '04 '06 '08 '10 '12 '14 '16

Historic Average

(data since 1971)

Record Affordability

Index = 214.5

Home Affordability 

Index

Source: National Association of Realtors 

3

4

5

6

7

8

9

'00 '02 '04 '06 '08 '10 '12 '14 '16

Interest Rate of 30 Year Fixed-Rate Mortgages 

Percent

Source: Freddie Mac 

100

110

120

130

140

150

160

170

180

'00 '02 '04 '06 '08 '10 '12 '14 '16

Attitudes Towards Buying

Long-Run Average

(data since 1986)

Source: University of Michigan Consumer Survey

Index (Good minus Bad plus 100)
8

May 2016

Senior loan officers at banks report

easing mortgage lending standards in

recent quarters. The last seven quarters

mark the first period of sustained easing

since the period of dramatic tightening

during the financial crisis. (Note that the

level of the line shown corresponds to the

change in lending standards, with values

below 0 representing an easing of lending 

standards and values above 0 representing a 

tightening).

Despite the easing, lending is still 

restrained, and riskier borrowers continue

to have very limited access to mortgage

credit. Mortgage originations have risen, on 

net, over the past year, but the pick-up has

been driven largely by borrowers with credit

scores above 780. Originations by

borrowers with credits scores below 780 are 

well below pre-crisis levels. Almost no

mortgages are being extended to borrower

with FICO scores below 660.

The median FICO score of newly originated 

mortgages has fallen slightly in recent 

quarters to around 750, but is still up 

from roughly 700 in the early 2000s. At

the 10th percentile, the FICO score for new

mortgages was down to 642 by the end of 

2015, compared with less than 600 in the

early 2000s.

-40

-20

0

20

40

60

80

100

90 94 98 02 08 10 14

FRB Senior Loan Officer Opinion Survey 

on Mortgage Lending

Tightening

Net Percent of Banks Reporting 

Tightening Standards

Easing

median

25th percentile 

10th percentile 

500

550

600

650

700

750

800

'00 '02 '04 '06 '08 '10 '12 '14

Credit Score at Mortgage Origination

Score

Source: FRBNY Consumer Credit Panel/Equifax Note: Credit Score is Equifax Riskscore 3.0; mortgages include first-liens only.

0

200

400

600

800

1,000

'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Mortgage Originations by Credit Score 

<620 620-659 660-719 720-779 780+

Billions of dollars

Source: FRBNY Consumer Credit Panel/Equifax Note: Credit Score is Equifax Riskscore 3.0; 

Underpinnings of Housing Demand
9

May 2016

Household formation fell sharply over 

the last two quarters. In the year ending 

in March, just 538,000 households were 

formed. The explanation for the decline

over the past six months is unclear. 

Between mid-2006 and 2014Q3, the rate of 

household formation averaged roughly half 

its historical average of 1.2 million per year. 

Household formation surged at the end of 

2014 and remained above its historical 

average through 2015Q3. 

The proportion of young adults who are 

working has seen a partial recovery. The 

employment-to-population ratio for 

individuals ages 25-34 has reversed more 

than half of the decline that occurred during 

the recession. The strengthening labor 

market should support household formation 

going forward.

Higher rents are an obstacle to young 

adults establishing their own households. 

The supply of rental housing appears to 

have not risen as fast as demand and, as a 

result, rents have been increasing rapidly. 

They outpaced overall inflation by 

2.6 percentage points over the year ending 

in April. 

Household Formation 

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

'00 '02 '04 '06 '08 '10 '12 '14 '16

Historic Average

(data since 1956)

Source: U.S. Census Bureau, Treasury calculation 

Millions Household Formation 

70

72

74

76

78

80

82

84

'00 '02 '04 '06 '08 '10 '12 '14 '16

Employment-to-Population Ratio 

Percent Ages 25-34

Source: Bureau of Labor Statistics

-2.5

0.0

2.5

5.0

7.5

'00 '02 '04 '06 '08 '10 '12 '14 '16

Growth in Rents vs. Overall Inflation

Year-over-year percent change

CPI-U: All Items

Source: BLS

CPI-U: Rent of 

Primary Residence
10

May 2016

The homeownership rate slipped in

2016Q1. The homeownership rate was 63.6

percent in 2016Q1, down from 63.7 in the 

previous quarter, and just marginally higher

than the four-decade low of 63.5 percent in 

2015Q2. The homeownership rate may 

stagnate in coming quarters as household 

formation continues to recover because 

newly formed households are more likely to 

rent before purchasing a home.

First-time home buyers account for 

around half of purchase mortgage 

originations. The share of newly originated 

mortgages going to first-time buyers was 

52.1 percent in March, higher than the 51.4

percent recorded a year ago.

87 percent of households headed by 

young adults that are renting say that 

they would prefer to own if they could 

afford it. Of those households, the most 

commonly cited reasons for not owning are 

lack of downpayment (59 percent) and not 

being able to qualify for a mortgage to buy 

a home (35 percent).

59

35

0 10 20 30 40 50 60 70

Cannot afford

downpayment

Cannot qualify

for a mortgage

Percent

Primary Reasons for Renting among 

Young Renters who Prefer to Own

Source: Report on Economic Well-Being of U.S. Households in 2014, Federal Reserve Board 

Homeownership

60

62

64

66

68

70

'80 '85 '90 '95 '00 '05 '10 '15

Homeownership Rate

Percent

Source: U.S. Census Bureau

47

49

51

53

55

'13 '14 '15 '16

Share of Mortgages Accounted by 

First-time Buyers Percent

Source: American Enterprise Institute
11

May 2016

New single-family home sales remain on 

a very gradual uptrend. At an annual rate 

of 511,000 in March, they were 1.6 percent 

higher than their average level in 2015.

New single-family home sales averaged 

503,000 units for all of 2015, the best annual 

performance since 2007. Still, the current 

pace of sales is only about half the level 

seen prior to the boom in the early 2000s. 

Sales of existing single-family homes

have been moving sideways in recent 

months at a level that is only a little 

below that seen in the early 2000s. 

Existing single-family home sales 

rebounded in March following a sharp drop

in the previous month. Existing home sales

also showed sharp swings last fall because 

of new mortgage disclosure regulations that 

reportedly delayed contract signings by a 

few days. 

The National Association of Realtors 

index of pending sales of existing homes

rose to a ten-month high in March. The 

index is a leading indicator of existing 

home sales, which are recorded at the 

closing of the sale. The National 

Association of Realtors is projecting that 

existing home sales will rise 2.4 percent in 

2016.

Home Sales

0

200

400

600

800

1000

1200

1400

1600

'02 '04 '06 '08 '10 '12 '14 '16

Thousands New-Single Family Home Sales 

Source: U.S. Census Bureau 

2

3

4

5

6

7

'00 '02 '04 '06 '08 '10 '12 '14 '16

Source: National Association of Realtors 

Millions Existing Single-Family Home Sales 

60

70

80

90

100

110

120

130

'02 '04 '06 '08 '10 '12 '14 '16

Pending Existing Home Sales

Source: National Association of Realtors, Treasury Calculation

Index, 2002: Jan = 100
12

May 2016

After rising at a high single-digit to 

low-double-digit pace in late 2013 and 

early 2014, the pace of home price 

appreciation has eased. Home prices are 

now growing at a more sustainable midsingle-digit pace.

Home prices remain below their precrisis peaks. Most measures for the nation 

as a whole are currently around early 2005 

levels. The FHFA Purchase-Only Home Price 

Index is the only one that has surpassed its 

pre-recession peak. Forecasters generally 

believe that home price appreciation will 

remain moderate going forward. 

Participants in the 2016Q1 Pulsenomics/

Zillow home price survey expect home 

prices to rise 3.7 percent over the four 

quarters of 2016.

The ratio of home prices to rents, a 

common way to assess whether home 

prices are overvalued, remains well 

below its pre-crisis peak. That said, the 

substantial appreciation of home prices 

since late 2012 has pushed up this ratio, 

and it is now above its pre-crisis range.

Home Prices

0.8

1.0

1.2

1.4

1.6

1.8

2.0

'84 '88 '92 '96 '00 '04 '08 '12 '16

Percent Price-to-Rent Ratio 

Source: Ratio of CoreLogic National Home Price Index to CPI Owner's Equivalent 

Rent. Both Indexes set to 100 in January 1983. 

-24

-16

-8

0

8

16

24

'00 '02 '04 '06 '08 '10 '12 '14 '16

20-City Case-Shiller

FHFA Purchase-Only

CoreLogic

Zillow

Changes in Home Prices 

Source: Standard and Poors, FHFA, CoreLogic, Zillow

12-month percent change 

100

120

140

160

180

200

220

'00 '02 '04 '06 '08 '10 '12 '14 '16

20-City Case-Shiller

FHFA Purchase-Only

CoreLogic

Zillow

Home Prices 

Source: Standard and Poors, FHFA, CoreLogic, Zillow 

Index, January 2000 =100 
13

May 2016

Applications for home purchase 

mortgages have been trending upward 

over the past year. Even so, purchase 

applications remain well below pre-crisis 

levels. Refinancing activity has been very 

low since mid-2013 as most borrowers who 

have been able to refinance have already 

done so.

New mortgage originations have 

increased over the past year but 

remain low by pre-crisis standards. 

New mortgage originations rose to 

$437 billion in 2015Q4, up from a low of 

$354 billion in 2014Q4. The low level of 

mortgage originations stands in contrast 

to the pattern of some other forms of 

household credit, including auto loan 

originations, which have been increasing 

briskly along with sales and now stand 

near the top of their historical range.

The share of new mortgage originations 

backed by the government has fallen

since its 2009 high, but remains higher

than boom levels. About 70 percent of new 

mortgages were backed by the FHA, VA, or 

GSEs in 2015 (dark blue and light blue

portions of bars). While bank portfolio 

lending has increased noticeably, the 

private-label mortgage-backed securities

market has experienced essentially no 

recovery since collapsing in late 2007.

Mortgage Originations

0

100

200

300

400

500

600

700

800

900

0

50

100

150

200

250

'04 '06 '08 '10 '12 '14

Auto Loan (Left Axis)

Mortgage (Right Axis)

Source: Federal Reserve Bank of New York 

Billions

New Originated Installment Loan Balances

Billions

0%

20%

40%

60%

80%

100%

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Mortgage Originations by Investor

GSE securitization FHA/VA securitization PLS securitization Portfolio

Source: Inside Mortgage Finance and Urban Institute 

Share, percent

0

30

60

90

120

150

180

210

0

500

1000

1500

2000

2500

3000

'00 '04 '08 '12 '16

Mortgage Applications

Source: Mortgage Bankers Association

Index, 2000:Jan 7 = 100

Purchase (right scale)

Refinance (left scale)
14

May 2016

Mortgage foreclosure and delinquency 

rates continue to normalize. The share of

homes in foreclosure declined to 1.6 percent 

of outstanding loans in 2016Q1. The rate of 

mortgages in default (90+ days delinquent 

or in foreclosure) fell to 3.3 percent in 

2016Q1, compared with a pre-crisis average 

of around 2 percent. 

Re-default rates for borrowers who have

received a mortgage modification have

run significantly lower for mortgages that

were modified more recently. Mortgages

that were modified in 2013 (24 months ago)

had re-default rates that were between 32

and 55 percentage points lower than those

modified in 2008. 

The share of sales represented by REO

sales has trended down over the past 3

years. In February 2016, REO sales stayed

around 8 percent of total sales. The share 

associated with short sales remained 

relatively constant at around 3 percent in 

recent months. 

Delinquencies, Foreclosures and Distressed Sales

0

2

4

6

8

10

12

'00 '02 '04 '06 '08 '10 '12 '14

Source: Mortgage Bankers Association and Haver Analytics 

Percent

Foreclosure and Delinquency Rates 

Percent of loans 90 or more days delinquent

Percent of loans in 

foreclosure

Percent of loans 90 days or more delinquent or in 

foreclosure

0

20

40

60

80

'08 '09 '10 '11 '12 '13

Fannie Mae Freddie Mac

Government-Guaranteed Private

Portfolio Loans Overall

Percent

Re-Default Rate 24 Months after Modification 

Source: OCC Mortgage Metrics Report for Q1-2015 

0

5

10

15

20

25

30

35

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16

Short Sales Share REO Sales Share

Distressed Sales as a Percent of Total Sales 

Source: CoreLogic

Percent 
15

May 2016

Rising home prices have greatly reduced

the number of underwater borrowers. 

The share of mortgage loans with negative

equity was 8.6 percent in 2015Q4, down 

from 10.3 percent in 2015Q1. The number of

homes now underwater stands at

4.3 million, a 64 percent drop since the 2011

peak. Mortgages that are very underwater, 

with negative equity exceeding 25 percent, 

have declined and are now 37 percent of all 

underwater mortgages.

The aggregate amount of negative 

equity has fallen significantly. Since 

2010Q1, aggregate negative equity has 

fallen from more than $800 billion to 

around $300 billion in 2015Q4.

Negative equity rates are still very high 

in some states. Around 20 percent of 

mortgaged residential properties in Nevada 

and Florida still have negative equity. 

However, these rates have fallen by more 

than half in these two states since the 

beginning of 2013.

Negative Equity

0

5

10

15

20

25

30

'10 '11 '12 '13 '14 '15

100-105 105-125 125+

Percent 

Share of Loans that are Underwater by 

Loan-to-Value Ratio 

Source: CoreLogic Equity Report, 2015 Q4 

0

200

400

600

800

'10 '11 '12 '13 '14 '15

Amount of Negative Equity 

Billions of dollars 18.7

17.1

14.6 14.0 13.5

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

NV FL IL AZ RI

Negative Equity Share in Top 5 States
16

May 2016

0.00

5.00

10.00

15.00

20.00

25.00 NJ NY MEFL DERI CT MS DC MDNVHI PA NMOHIL MALAINOKKYVTAL SCAR

Q1 2016 value Minimum since Q1 2000 Maximum since Q1 2000

Percent, since Q1 2000 

Serious Delinquencies for 25 Highest-Rate States: Q1 2016

Source: Mortgage Bankers Association/Haver 

Serious delinquencies have fallen across

the country but the degree of

improvement varies by state. They remain

near peak levels in some states, particularly

in judicial foreclosure states such as New

Jersey and New York. However, serious

delinquencies are down more than 75

percent from their peak in Florida, a judicial 

state that passed a law in June 2013

speeding up the foreclosure process. 

Serious delinquencies have also fallen

markedly in hard-hit areas with flexible 

foreclosure laws, such as Nevada. 

Foreclosure inventories have declined in

many states but remain relatively high in

others. Judicial foreclosure is an important

factor: 15 of 25 states that employ the

practice have noticeably elevated rates (two 

darkest shades). Other states with high 

inventories, like Nevada, are still struggling 

economically.

State Detail 

Foreclosure Inventory by State

Source: CoreLogic Market Pulse, data as of February 2016

0.3 0.5 0.9 1.3 2.2 4%

AK

AZ

CA

CO

MN MI

NE

ND

UT

AL GA

ID

KS

MO

MT

NH

NC

SD

TN

TX

WV VA

WI

WY

AR

IA IN

KY

MS

OR

SC

VT

WA

CT

DC

IL

LA

ME

MD

MA

NV

NM

OH

OK

PA

RI

DE

FL

HI

NJ

NY