The April edition of the Housing Scorecard has been issued by Treasury and the Department of Housing and Urban Development (HUD). It showed "continued mixed signals and some signs of weakness in the market - despite growing evidence of progress in the broader economy," according to Assistant HUD Secretary Raphael Bostic. 

The Obama Administration's monthly housing scorecard recaps data from a number of reports issued earlier by both public and private sources such as the U.S. Census, S&P Case/Shiller, RealtyTrac, and the Mortgage Bankers Association.  Most of the new information in the scorecard relates to the Making Home Affordable Modification Program (HAMP).

The HAMP program, which is under attack by Congress and threat of defunding, seems to have finally hit its stride.  36,000 trial modifications were converted to permanent status in March, the largest number since the program began in April 2009.  A total of 670,000 loans have been permanently modified during this period.  22,000 homeowners began trial modification periods since the last HAMP report bringing the total to 1.56 million.  Trial modifications have been cancelled for 751,500 loans since the program began and 137,363 homeowners remain in trial status.

"The numbers of homeowners both entering HAMP and converting from trial to permanent modifications each month are a powerful reminder of the role this program is playing in delivering much-needed assistance to families facing a housing market that is still very tough," said Acting Assistant Secretary for Financial Stability Tim Massad. "And by providing modifications that are sustainable for homeowners over time, HAMP is setting standards for the industry that ultimately mean more options for more families to avoid foreclosure."

The modifications are increasingly successful.  Permanent modifications began in earnest in Q3 2009 so those and the modifications made in the next two quarters have now aged past the one year mark with an average serious delinquency rate (90+ days) of 15.9 percent. There was a better than 4 percentage point improvement between loans made in the earliest of those three quarters and those made in the latest.  Loans that are in earlier stages of maturity appear to be performing substantially better yet.

The greater the reduction in monthly payments achieved through modification the more successful that modification is turning out to be.  Among the older vintage modifications, those that received less than a 20 percent payment reduction are running a 26 percent serious delinquency rate after one year while those with at 30-40 percent reduction have a rate of 16.1 percent and those with a reduction in excess of 50 percent have a rate of 8.8 percent.  This pattern is consistent at 3, 6, and 9 month benchmarks and across all vintages of modification.

Recapping previously released data...

Home prices remained weak under continued strain from foreclosures and distressed homes but delinquency rates maintained a downward trend compared to early 2010 and foreclosure starts and completions remain below peak. Part of the improving foreclosure picture is a result of on-going internal reviews of procedures related to foreclosure processing, a short-term situation. Plus banks are employing strategies aimed at reducing the home price impact brought on by sudden spikes in local foreclosure inventory.

With house prices still dropping in some areas, aggregate home equity was down fractionally in the first quarter and now hovers slightly above $6 trillion.  This is slightly above the record low point reached in the first quarter of 2009 but is less than half the homeowner equity that existed early in 2006.   

The low prices coupled with continued record low interest rates make houses extremely affordable.  The National Association of Realtors® (NAR) Housing Affordability Index is 187.8 where a score of 100 indicates that a family with a median income has exactly enough income to qualify for a mortgage on a median priced home.

Sales of existing homes were up about 50,000 from the previous month and the inventory of existing homes for sale dropped from 8.5 months supply to 8.4 months.  The inventory of new homes also dropped from 8.2 months to 7.3 months but the number of vacant homes held off of the market increased from 3.6 million to 3.86 million.

FULL REPORT