Nashville-area homeowners continued to improve their financial standing in June: The 90-day delinquency rate among mortgage borrowers ticked down to 2.35 percent, half a point below where it was at the end of 2014. Here's how the delinquency and foreclosure rates have fared so far this year. And here's CoreLogic's national report.
There seems to be no stopping the Nashville-area housing market these days. The latest Freddie Mac Multi-Indicator Market Index shows a local housing economy rising for the fifth straight month to 90.0. It was under 79 in January and is now up 58 percent from its fall 2010 trough. Freddie Mac says Middle Tennessee is now the eighth-strongest housing market in the United States. (The company's national news release is here.)
In what should be an encouraging sign for many other local businesses, Freddie Mac researchers say the biggest gains are coming thanks to better payment-to-income ratios. Given how steadily home prices are rising, that statistic might suggest local workers' compensation is more than keeping up.
The health of Middle Tennessee's housing market continues to improve, according to research firm CoreLogic. At the end of May, just 0.38 percent of all homeowners were in foreclosure — compared to 0.56 percent statewide and 1.29 percent nationally — while the 90-day mortgage delinquency rate has dropped more than 40 basis points since the end of 2014.
The Middle Tennessee housing market continues to grow healthier, according to the Freddie Mac Multi-Indicator Market Index, which tracks transaction data as well as residents' incomes, mortgage applications and overall job growth. The measure ended May up more than 8 percent year over year, its fastest growth pace since last August and almost three points higher than in March. Nashville's MiMi reading is at its highest since January 2008.
Breaking down the latest MiMi reading — you can check it out here — the recent surge is mainly due to a big improvement in Nashville's job market. Mortgage applications and credit quality have been in good shape for a while, which leaves the index's payment-to-income ratio component as the only laggard. But it, too, is improving and has climbed four points to almost 73 in the past three months.
It's not so much a news flash as an affirmation of what a lot of us are seeing out and about every day: The Middle Tennessee area's housing market is growing stronger every month. Freddie Mac's Multi-Indicator Market Index rose to 87.4 in April and is now up almost 10 points from three months earlier. That's thanks largely to the region's strong job growth.
Freddie Mac's national report is here.
About 4.2 percent of Nashville-area homeowners owe more on their mortgages than their houses are worth, according to real estate research firm CoreLogic. That March 31 number amounts to almost 14,900 homes but is down significantly from the 20,787 homes — or 5.9 percent of the total — that were in negative equity a year earlier. Another 1.5 percent of all homes are considered to be "near negative equity," down from 2.9 percent in early 2014.
Nationally, CoreLogic says 10.2 percent of homeowners with mortgages were underwater at the end of the first quarter. That was down from 12.9 percent the year before.
Of the more than 50 million residential properties with a mortgage, approximately 9.7 million, or 19.4 percent, have less than 20 percent equity (referred to as "under-equitied"), and 1.3 million, or 2.7 percent, have less than 5 percent equity (referred to as near-negative equity). Borrowers who are "under-equitied" may have a more difficult time refinancing their existing homes or obtaining new financing to sell and buy another home due to underwriting constraints. Borrowers with near-negative equity are considered at risk of moving into negative equity if home prices fall.
The financial state of Nashville's homeowners continues to improve ever so steadily, according to the researchers at CoreLogic. (See the chart on the right.) At the end of March, barely 2.5 percent of all mortgages in Middle Tennessee were delinquent 90 days or more. That's down 70 basis points from a year earlier and a full point below the number of early 2014.
Improvement on the foreclosure side of the housing market have been a little harder to come by of late. But the 0.47 percent rate is close to a post-crash low and bode well both for continued housing price gains and for the profitabilty of banks and other home loan lenders.
The graphic below shows a slightly bigger picture in the Freddie Mac Multi-Indicator Market Index, which includes some payment data of the kind tracked by CoreLogic but also throws in information on a city's incomes, mortgage applications and overall job growth. Improvements in the last two of that trio have pushed Nashville's score to its highest point since before the Great Recession.
Nashville's MiMi gain in March was the fourth-best among the country's 100 largest cities. For more national perspective, click here.
By most accounts, the Middle Tennessee housing market is cooking. But the aftershocks of the financial crisis have resulted in an underwriting conservatism that has shut out some potential homebuyers. Nonprofit Affordable Housing Resources is looking to step in with a loan program that helps bridge the gap for house hunters with higher debt ratio and lower credit scores.
To become eligible, borrowers must show a two-year work history and take an eight-hour education class. They also must contribute a down payment of at least 1 percent.
“The pendulum has now swung so far in that direction that it is preventing responsible people from getting a 30-year, fixed-rate mortgage,” said Eddie Latimer, AHR's CEO. “They are being kept from buying their first home, an important rung in the economic ladder.”
Research firm CoreLogic says Nashville-area home prices, including distressed sales, rose 7.1 percent year over year in March. Take out transactions involving distressed properties and the 12-month price rise drops only a bit to 6.5 percent.
CoreLogic's latest national data set is here. It shows Tennessee as one of seven states where home prices are at record highs.
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