Quick update here: FHA REO inventory continues to skyrocket.
According to a report from Jon Prior of HousingWire this morning, the FHA had nearly 61,00 repossessed homes on its books at the end of 2010, a 47% increase from 2009. This is not really shocking, as REO inventory has been increasing across the board for the last few years. An additional 600,000 FHA mortgages are seriously delinquent, so look to see this number increase in the next couple of years.
Combined with the REO portfolios of Fannie Mae and Freddie Mac, the U.S. government (and by proxy, you and I, the taxpayers) now own 360,000 repossessed homes. It’s going to be tough to sell these properties, largely due to the fact that demand for homes is very weak, and will remain so as long as unemployment remains elevated.
The large number of unsold properties on the market (and being held in shadow inventory) will burden the housing market for years to come, applying downward pressure on home prices through increased supply. According to reports this morning from RealtyTrac, foreclosed properties accounted for 26% of residential home sales in 2010, a number that is likely to increase in the coming year. Find today's low mortgage rates here.
Comments (0)Subscribe to CommentsComment