The Office of Economic Policy

April 19, 2016

Since last summer, housing starts overall have moved sideways on net, as further increases in 

single-family starts have about offset a moderation in multifamily starts. However, the flatness 

in housing starts has yet to show through to residential investment because of the lags 

associated with housing construction. Residential investment rose at an annual rate of 

10 percent in 2015Q4, contributing 0.3 percentage point to GDP growth, and available 

indicators suggest that residential investment saw another track for another sizable gain in 

2016Q1. Meanwhile, residential construction employment has continued to rise steadily.

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. This moderation occurs as high home values, 

in some areas, challenge affordability for potential homebuyers. However, access to credit 

continues to slowly expand to reach borrowers with lower credit quality. In addition, home 

price valuations look to be somewhat elevated relative to pre-bubble norms.

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

also continues to drop.

This month’s dashboard includes a special topic that explores the degree to which the rebound 

in home prices since the Great Recession has supported consumer spending and how this 

“housing wealth effect” depends on the availability of credit and other factors. 

HOUSING DASHBOARD
1

April 2016

Pre-bubble 

norm 

(2000-2002 

average) Trough

Current 

level

Current level 

versus prebubble norm 

(2000-2002 

average)

New 921 270 512 9.1% -44.4%

Feb-11 Feb-16

Existing 4,779 3,060 4,510 6.8% -5.6%

Jul-10 Feb-16

New 311 142 240 1 9 -71

Jul-12 Feb-16 thousands thousands

Existing 1,836 1,550 1,650 -41 -186

Dec-15 Feb-16 thousands thousands

Housing starts 1,289 353 764 14.5% -40.7%

Mar-09 Mar-16

Building permits 1,257 337 727 9.3% -42.2%

Jan-09 Mar-16

115.7 137.3 188.4 5.3% 62.8%

Nov-11 Feb-16

Inflation-Adjusted 111.6 101.9 138.1 6.3% 23.8%

CoreLogic HPI Nov-11 Feb-16

Housing affordability 127 101.1 174.9 -2.3% 38.2%

Jul-06 Feb-16

5 9 8 5 8 6 -1

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

152 117 153 -1 1

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

1113 100 461 290 -653

2008-Q4 2015-Q4 thousands thousands

67.7 63.5 63.7 -0.8 -4

2015-Q2 2015-Q4 percentage point(s) percentage point(s)

Weakened

Improved

Weakened

Improved

Improved

Improved

Housing Market Flash

Tuesday, April 19, 2016

Improved

Improved

Current 12-month 

average versus yearearlier value

Single-family homes

Sales 

(thousands)

Inventory of homes 

available for sale 

(thousands)

Construction activity 

(thousands)

Improved

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
2

April 2016

Home prices have steadily recovered and 

are approaching the pre-recession peak. 

Home prices dropped more than 30 percent 

peak-to-trough during the housing bust. 

Since reaching the trough in late 2011, home 

prices have regained roughly 80 percent of the 

losses incurred during the downturn.

Rising home prices have restored a 

substantial amount of the housing wealth 

lost during the Great Recession. The slow 

but steady rise in home prices has helped 

households regain $6.1 trillion worth (nearly 

90 percent) of the real estate equity lost during 

the recession. The value of household real 

estate reached $22 trillion in 2015Q4 up from a 

low of $16 trillion in 2011Q4.

Studies have found that increases in home 

equity generally lead to increases in 

consumption. The magnitude of this effect has 

fluctuated over time. In the early 2000s,

households spent an estimated $4 to $5 for 

every $100 increase in a home’s value. More 

recent studies suggest that the since the Great 

Recession, the size of this “housing wealth 

effect” has fallen to roughly $2.1 These 

estimates imply that the increase in home values 

since 2012 has supported an additional $117 

billion in consumption.

 

1 Case, Karl E., John M. Quigley and Robert J. Shiller, “Wealth Effects Revisited 1975-2012” (Cowles Foundation Discussion Paper 

No. 1884, Yale University, 2013). The authors also suggest that there is a negative wealth effect for declining home prices. They 

estimate that for every $100 drop in a home’s price, consumption is reduced by $6.

Special Topic: The Great Recession and the Housing Wealth Effect

Apr-2006, 198.5

Nov-2011, 137.3

Jan-2016, 187.2

80

100

120

140

160

180

200

220

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

House Prices

CoreLogic Index with Distressed Sales (Jan. 2000=100)

Source: CoreLogic

0

2

4

6

8

10

12

14

16

18

20

'12 '13 '14 '15

Consumption Gains due to Rising Home Values

Billions

Source: Treasury Calculations based on Federal Reserve Board data 

$117.3 Billion

25

35

45

55

65

75

0

5

10

15

20

25

'00 '03 '06 '09 '12 '15

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 
3

April 2016

One explanation for the smaller housing 

wealth effect in recent years is that 

homeowners are less able or willing to 

extract equity from their homes to finance 

increases in consumption. In 2012Q2, the 

share of homeowners extracting cash when 

refinancing their mortgages dropped to an alltime low, thanks to low levels of equity, tight 

credit availability, and credit scores that were 

damaged during the Great Recession. Since 

then, the share of “cash-out” refinances has 

trended up to pre-bubble levels but, 

anecdotally, lenders report that households are 

taking less cash out than before.

Other types home equity borrowing have 

also declined. Notably, the volume of lending 

through home equity lines of credit has 

trended down, on balance, since 2009, even as 

home prices have rebounded in recent years. 

Tight credit standards are one reason why 

households have borrowed less against home 

equity.

Households’ response to housing wealth 

gains may also be muted because of a more 

general desire to strengthen their balance 

sheets. Since peaking in 2007, the ratio of 

household debt to income has fallen, on 

balance, partly because new borrowing for 

mortgages and housing-related debt has been 

muted. Also, households have voluntarily paid 

down debt and involuntarily extinguished debt 

through foreclosures and non-mortgage loan 

defaults. 

0

5

10

15

20

25

30

35

'98 '00 '02 '04 '06 '08 '10 '12 '14

Proportion of Cash-out Dollars from Mortgage Refinance Originations

Percent

Source: Freddie Mac

100

110

120

130

140

150

160

170

180

190

200

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

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

Home Equity Line of Credit Balance and Home Values 

Home Equity Line of Credit Volume, left scale

CoreLogic with Distressed Home Price Index, right scale

Billions

Source: Federal Reserve Bank of New York, CoreLogic

Index (2000 Q1= 100)

Special Topic: The Great Recession and the Housing Wealth Effect

90

100

110

120

130

140

'00 '03 '06 '09 '12 '15

Household Debt to Income Ratio

Percent

Source: Financial Accounts of the United States
4

April 2016

Residential investment continues to 

support GDP growth. Residential

investment rose at an annual rate of 

10 percent in 2015Q4, adding

0.3 percentage point to real GDP growth, 

matching the average contribution over the 

previous four quarters. Data through March

suggest that residential investment is on 

track for another sizable gain in 2016Q1. 

(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 13,800 jobs per month, 

compared with 12,100 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 

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 

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 
5

April 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) fell sharply in

March, but, smoothing through the monthly 

volatility, appear to remain on a gradual

uptrend. Multifamily starts (black line) 

surged in the first half of 2015 but have 

since moderated. 

Builder confidence remained generally 

upbeat in April. The National Association 

of Homebuilders index has recorded 

readings above 50 (meaning a majority of 

builders view the market positively) for the 

last 22 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 1.88 million units at the end of

February, 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 240,000. At the 

current sales pace, there is 4.4-month 

supply of existing homes available for sale; 

for new homes, the available inventory is 

equivalent to a 5.6-month supply.

Housing Starts and Inventories

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 

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
6

April 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 3.58 percent in the week ending 

April 14. The current rate is only 27 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 crept up 

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-April. 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)
7

April 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 it 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.

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; 

-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

Underpinnings of Housing Demand
8

April 2016

Household formation fell sharply in 

2015Q4. In the year ending in December, 

just 191,000 households were formed. The 

explanation for the decline 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 

2.8 percentage points over the year ending 

in March. 

-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

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

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 
9

April 2016

The homeownership rate edged up in

2015Q4. The homeownership rate was

63.7 percent in 2015Q4, up from a 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 

60

62

64

66

68

70

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

Homeownership Rate

Percent

Source: U.S. Census Bureau

Homeownership

47.0

49.0

51.0

53.0

55.0

'13 '14 '15 '16

Share of Mortgages Accounted by 

First-time Buyers Percent

Source: American Enterprise Institute
10

April 2016

New single-family home sales remain on 

a very gradual uptrend. At an annual rate 

of 512,000 in February, they were 

1.8 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 volatile in recent months. 

Existing single-family home sales fell 

sharply in February. Severe weather in the 

Northeast and Midwest may have held 

down the number of contract signings that 

month. They 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

rebounded to a seven-month high in 

February. 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
11

April 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. 0.8

1.0

1.2

1.4

1.6

1.8

2.0

'84 '87 '90 '93 '96 '99 '02 '05 '08 '11 '14

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. 

Home Prices

-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 
12

April 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 

significantly higher than pre-crisis levels. 

About 70 percent of new mortgages were 

backed by the FHA, VA, or GSEs in the first 

three quarters of 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.

0%

20%

40%

60%

80%

100%

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 2015 Q1-3

Mortgage Originations by Investor

GSE securitization FHA/VA securitization PLS securitization Portfolio

Source: Inside Mortgage Finance and Urban Institute 

Share, percent

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

Mortgage Originations

0

30

60

90

120

150

180

210

0

500

1000

1500

2000

2500

3000

'00 '03 '06 '09 '12 '15

Mortgage Applications

Source: Mortgage Bankers Association

Index, 2000:Jan 7 = 100

Purchase (right scale)

Refinance (left scale)
13

April 2016

Mortgage foreclosure and delinquency 

rates continue to normalize. The share of

homes in foreclosure declined to 1.6 percent 

of outstanding loans in 2015Q4. The rate of 

mortgages in default (90+ days delinquent 

or in foreclosure) fell to 3.4 percent in 

2015Q4, 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 January 2016, REO sales ticked up 

slightly to around 8 percent of total sales. 

The share associated with short sales 

remained relatively constant at around 3 

percent in recent months. 

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

Delinquencies, Foreclosures and Distressed Sales

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 
14

April 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 continues to fall. Since 2010Q1, 

aggregate negative equity has fallen from 

over $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
15

April 2016

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 nearly 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: 12 of 23 states that

employ the practice have noticeably 

elevated rates (darker red). Other states

with high inventories, like Nevada, are still

struggling economically.

State Detail 

Foreclosure Inventories by State as a 

Percent of All Mortgage Homes

Source: CoreLogic Market Pulse, data as of January 2016

0

5

10

15

20

25 NJ NY MEFL MS DERI CT MDNVPAIL OHDC NMINMAHI LAOKKYAL VTSC

Q4 2015 value Minimum since Q1 2000 Maximum since Q1 2000

Percent, since Q1 2000 

Serious Delinquencies for 25 Highest-Rate States: Q4 2015 

Source: Mortgage Bankers Association/Haver 
Information Memo Clearance Sheet

Subject: April 2016 Housing Dashboard

Drafted: Economic Policy – Marcelo Yoon 622-6423

Erin Troland 622-0181

Approved: Economic Policy – Karen Dynan (4/19/16)

Cleared: Exec Sec –

Economic Policy – Jane Dokko (4/19/16)