Magazine article Mortgage Banking

Midwest Housing Markets Struggling to Recover

Magazine article Mortgage Banking

Midwest Housing Markets Struggling to Recover

Article excerpt

The Midwest was the only region to post negative results for home prices during the most recent rolling quarter, according to Truckee, California - based Clear Capital[R] . The region saw its average home prices drop by 2.4 percent in the latest edition of Clear Capital's Home Data Index[TM] (HDI) Market Report. The company computes its HDI based on rolling quarter intervals that compare data from the most recent fourth months with the previous three months.

For the same period, the West, South and Northeast posted modest price gains of less than i percent, according to data through March 2012. The company reported that at the national level, home prices in the most recent quarter fell by 0.2 percent.

Clear Capital found that the real estate - owned (REO) saturation rate continued to climb in all regions. REO saturation measures the share of all sales that are made up of distressed properties. Clear Capital noted in a press release announcing the latest findings that the national REQ saturation rate and the regional REQ saturation rates climbed for the second month in a row. The company said this confirms that servicers are more aggressively moving their REQ backlog in the wake of the approval of the attorneys general settlement with the five biggest bank servicers.

In March, Clear Capital said, the national REQ saturation rate went up 1.2 percentage points from the prior month. The national REO saturation rate hit 27 percent in March. "The Midwest contributed the most to the increase, jumping 3.8 points over the quarter to 34.3 percent, with the other regions all seeing softer increases," the company said.

The REO saturation rate by region ranges from a high of 30.9 percent in the West to 30.5 percent in the Midwest, 24.4 percent in the South and a low of 8 percent in the Northeast.

"With the exception of the Midwest, positive growth in rolling quarter-over-quarter prices is an encouraging sign that the markets are rebounding from the winter slowdown earlier than usual," said Alex Villacorta, director of research and analytics at Clear Capital.

He added, "We are continuing to see overall short-term home-value strength against the rising REO saturation." He noted further, "Even with the relatively modest declines seen over the last few months, markets have continued to show signs of bottoming out."

Clear Capital put the Phoenix-Mesa-Scottsdale, Arizona market at the top of its list of highest-performing metro markets in its latest report. …

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