Distressed Sales Drop

Posted: 2/07/2017

The 2016 Home Sales Report, released by ATTOM Data Solutions, shows that 16.2 percent of property sales across the nation in 2016 were short sales or bank owned foreclosure auctions. Trending down from 18.8 percent of home sales compared to 2015, this is the lowest amount of distressed sales since 2007.

Economists believe that home values will continue to rise as long as the US does not incur another recession. The Trump administration has hinted that some of the financial policies of the Dodd-Frank Act that were put in place after the housing market collapse will be reformed. This could loosen credit requirements and make it easier for homebuyers to obtain a mortgage, but abuse could lead to another situation of lenders giving out bad loans.

The new administration has also moved to suspend a yet to be implemented fee reduction on loans obtained through the Federal Housing Administration. The fee cut would have allowed homeowners to save a quarter percent on money borrowed, which would equate to $250 savings per every $100,000. Reactions were mixed, with critics saying the order takes money out of low-income homeowner's pockets. On the other hand, the move would protect taxpayers in the event of another housing market crash.

While home prices are predicted to rise this year, the National Association of Realtors is expecting prices to plateau. While the number of homebuyers has increased over the past 3 years, construction wasn’t able to keep up with demand. With new construction on the horizon, more available homes will mean prices will flatten.