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Median Home Prices Reach A New Peek

ATTOM Data Solutions released its Q2 2019 U.S. Home Sales Report, which shows that U.S. single family homes and condos sold for a median price of $266,000 in the second quarter, up 10.8 percent from the previous quarter and up 6.4 percent from a year ago — reaching a new median home price peak.

Meanwhile, the report also shows that homeowners who sold in the second quarter had owned an average of 8.09 years, reaching a new peak, up 3 percent from last quarter and up 4 percent from Q2 2018. Homeownership tenure averaged 4.21 years nationwide between Q1 2000 and Q3 2007, prior to the Great Recession.

“As warmer weather brings a rush of house hunters to the market, the latest spike in median home prices marked the largest quarterly increase since the second quarter of 2015 and the third biggest increase since the market started climbing out of the Great Recession in 2012,” said Todd Teta, chief product officer at ATTOM Data Solutions. “However, in looking at historical trends, the second quarter of every year has always shown a quarterly increase, going as far back as 2005. So, with mortgage rates dipping to new lows, it’s no surprise that people were wanting to buy a home, even if prices were at their peak. We expect to see milder home prices in the coming quarters.”

Annual home price appreciations rising in Milwaukee, Boston and Salt Lake City

Median home prices in 133 of the 149 metro areas analyzed in the report (89 percent) saw an annual home price appreciation in the second quarter of 2019, led by Atlantic City, New Jersey (16.0 percent increase); Boise City, Idaho (14.0 percent increase); Chattanooga, Tennessee (13.9 percent increase); Mobile, Alabama (11.2 percent increase); Madison, Wisconsin (10.8 percent increase).

Those major metros with at least 1 million people that saw annual home price appreciations occurring in the second quarter of 2019 included: Milwaukee, Wisconsin (9.0 percent increase); Boston, Massachusetts (9.0 percent increase); Salt Lake City, Utah (8.7 percent increase); Columbus, Ohio (8.1 percent increase); and Birmingham, Alabama (6.3 percent increase).


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Prices in Denver, Austin, Dallas and Nashville 50+ percent above pre-recession peaks

Median home prices in 110 of the 149 metro areas analyzed in the report (74 percent) were above pre-recession peaks in the second quarter of 2019, led by Greeley, Colorado (87 percent above); Shreveport, Louisiana (81 percent above); Denver, Colorado (80 percent above); Austin, Texas (77 percent above); and Fort Collins, Colorado (76 percent above).

Including Denver and Austin, other major metros with at least 1 million people and with Q2 2019 median home prices at least 40 percent above pre-recession peaks were Dallas-Fort Worth, Texas (72 percent above); Nashville, Tennessee (71 percent above); San Antonio, Texas (58 percent above); Houston, Texas (54 percent above); and San Jose, California (54 percent above).


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Average home seller gains increase quarterly and annually

U.S. homeowners who sold in the second quarter of 2019 realized an average home price gain since purchase of $67,500, up from an average gain of $57,706 in Q1 2019 and up from an average gain of $60,100 in Q2 2018. The average home seller gain of $67,500 in Q2 2019 represented an average 33.9 percent return as a percentage of original purchase price.

Among 149 metropolitan statistical areas analyzed in the report, those with the highest average home seller returns in Q2 2019 were San Jose, California (85.0 percent); San Francisco, California (71.6 percent); Seattle, Washington (65.6 percent); Salem, Oregon (62.3 percent); and Salt Lake City, Utah (60.7 percent).

Average homeownership tenure drops annually in Tucson, Portland and Phoenix

Counter to the national trend which saw the longest homeownership tenure to date, the average homeownership tenure in Q2 2019 decreased from a year ago in 28 of 108 metro areas analyzed in the report (26 percent), led by Merced, Colorado Springs, Vallejo, Springfield and Bremerton.


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Among major metropolitan areas that have a population of at least 1 million and where tenure decreased in the second quarter of 2019. The longest average times sellers lived in their homes were in Tucson, Arizona (8.88 years); Portland, Oregon (9.04 years); Phoenix, Arizona (8.17 years); San Francisco, California (10.26 years); and Tampa-St. Petersburg, Florida (7.85 years).

Share of cash sales decrease annually

All-cash sales represented 25.0 percent of all single family and condo sales in Q2 2019, down from 27.7 percent of all sales in the previous quarter, and down from 26.9 percent of all sales in Q2 2018.

Among major metropolitan areas with a population of at least 1 million, those with the highest share of all-cash sales in Q2 2019 were; Miami, Florida (40.5 percent); Detroit, Michigan (36.7 percent); Birmingham, Alabama (34.9 percent); Tampa-St. Petersburg, Florida (34.2 percent); and Jacksonville, Florida (33.9 percent).


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Institutional investor sales highest in Atlanta, Charlotte, and Memphis

The share of U.S. single family home and condo sales sold to institutional investors (entities buying at least 10 properties in a calendar year) was 2.2 percent in the second quarter of 2019, up from 1.9 percent in the previous quarter but down from 2.4 percent a year ago.

Among the metropolitan statistical areas with a population of at least 1,000,000 and at least 50 institutional investor sales in Q2 2019, those with the highest share of institutional investor sales in the second quarter were; Atlanta, Georgia (7.9 percent); Charlotte, North Carolina (6.7 percent); Memphis, Tennessee (6.4 percent); Birmingham, Alabama (5.6 percent); and Raleigh, North Carolina (5.5 percent).

Share of FHA buyers increase annually

Sales to FHA buyers (typically first-time homebuyers or other buyers with a low-down payment) represented 11.6 percent of all U.S. single family and condo sales in Q2 2019, up from 11.1 percent of all sales in the previous quarter and up from 9.9 percent in Q2 2018.

Among metro areas with a population of at least 1 million, those with the highest share of sales to FHA buyers were Riverside, California (18.6 percent); Indianapolis, Indiana (18.4 percent); San Antonio, Texas (18.2 percent); Providence, Rhode Island (17.8 percent); and Kansas City, Missouri (17.6 percent).

Share of distressed sales continuing downward trend

Total distressed sales — bank-owned (REO) sales, third-party foreclosure auction sales, and short sales — accounted for 11.4 percent of all single family and condo sales in Q2 2019, down from 14.0 percent in the previous quarter and up less than one percent from the same time last year.

Among 149 metropolitan statistical areas with a population of at least 200,000 and at least 100 total distressed sales in Q2 2019, those with the highest share of total distressed sales were Atlantic City, New Jersey (27.6 percent); Trenton, New Jersey (25.3 percent); Norwich-New London, Connecticut (22.2 percent); Erie, Pennsylvania (22.1 percent); and Macon, Georgia (20.7 percent).

Counter to the national trend of a slight annual uptick, 110 of the 150 metro areas (73 percent) posted year-over-year decreases in share of distressed sales. Those major metros with a population greater than 1 million that saw an annual decline were Dallas-Fort Worth, Texas (down 25.7 percent); Boston, Massachusetts (down 24 percent); Portland, Oregon (down 23.6 percent); Buffalo, New York (down 22.1 percent); and Tucson, Arizona (down 21.2 percent).

Data Shows That Home Flipping Is Still Popular

Information from ATTOM Data Solutions shows that 49,059 U.S. single family homes and condos were flipped in the first quarter of 2019, down 2 percent from the previous quarter and down 8 percent from a year ago to a three-year low.


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The 49,059 homes flipped in the first quarter represented 7.2 percent of all home sales during the quarter, up from 5.9 percent in the previous quarter and up from 6.7 percent a year ago — the highest home flipping rate since Q1 2010.


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Homes flipped in Q1 2019 sold at an average gross profit of $60,000, down from an average gross flipping profit of $62,000 in the previous quarter and down from $68,000 in Q1 2018 to the lowest average gross flipping profit since Q1 2016.


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The average gross flipping profit of $60,000 in Q1 2019 translated into an average 38.7 percent return on investment compared to the original acquisition price, down from a 42.5 percent average gross flipping ROI in Q4 2018 and down from an average gross flipping ROI of 48.6 percent in Q1 2018 to the lowest level since Q3 2011 — a nearly eight-year low.


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“With interest rates dropping and home price increases starting to ease, investors may be getting out while the getting is good, before the market softens further,” said Todd Teta, chief product officer at ATTOM Data Solutions. “While the home flipping rate is increasing, gross profits and ROI are starting to weaken and the number of investors that are flipping is down 11 percent from last year. Therefore, if investors are seeing profit margins drop, they may be acting now and selling before price increases drop even more.”

Home flipping rate up from year ago in 62 percent of local markets

Eighty-five of 138 metropolitan statistical analyzed in the report (62 percent) posted a year-over-year increase in their home flipping rate in Q1 2019, including Columbus, Georgia (up 83 percent); Raleigh, North Carolina (up 73 percent); Charlotte, North Carolina (up 65 percent); McAllen-Edinburg, Texas (up 55 percent); and Milwaukee, Wisconsin (up 49 percent).

Along with Raleigh, Charlotte, and Milwaukee, other metro areas with a population of at least 1 million and a home flipping rate increasing in the double digits were San Antonio, Texas (up 47 percent); Houston, Texas (up 41 percent); Atlanta, Georgia (up 38 percent); Pittsburgh, Pennsylvania (up 36 percent); and Minneapolis, Minnesota (up 33 percent).

The number of homes flipped reached new peaks in Q1 2019 for Raleigh, North Carolina and San Antonio, Texas in the first quarter of 2019.

Home flip lending volume up 35 percent to 12-year high

The total dollar volume of financed home flip purchases was $6.4 billion for homes flipped in the first quarter of 2019, up 35 percent from $4.7 billion in Q1 2018 to the highest level since Q2 2007 — over a 12-year high. Flipped homes originally purchased by the investor with financing represented 37.5 percent of homes flipped in Q1 2019, down from 39.5 percent in the previous quarter and down from 41.2 percent a year ago.

Among 53 metropolitan statistical areas analyzed in the report with at least 1 million people, those with the highest percentage of Q1 2019 completed flips purchased with financing were San Diego, California (56.0 percent); Seattle, Washington (52.5 percent); San Francisco, California (51.7 percent); Denver, Colorado (51.6 percent); and Boston, Massachusetts (51.3 percent).

Seriously Underwater Properties Increase

ATTOM Data Solutions released its Q1 2019 U.S. Home Equity & Underwater Report, which shows that at the end of the first quarter of 2019, more than 5.2 million (5,223,524) U.S. properties were seriously underwater (where the combined balance of loans secured by the property was at least 25 percent higher than the property’s estimated market value), up by more than 17,000 properties from a year ago.


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The 5.2 million seriously underwater properties at the end of Q1 2019 represented 9.1 percent of all U.S. properties with a mortgage, up from 8.8 percent in the previous quarter but down from 9.5 percent in Q1 2018.


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“With home prices increasing at a slower pace in 2018, than in previous years, the potential for people to climb out from mortgages that are underwater or advance into equity-rich territory, tends to be reduced,” said Todd Teta, chief product officer at ATTOM Data Solutions. “However, only one in 11 mortgages are seriously underwater today, compared to nearly one in three during the depths of the recession. Although, if the latest trend continues, it will raise another clear signal of a market slowdown, which will be good for buyers, but not so good for sellers. But if the pattern of the past few years takes hold – with levels of underwater and equity rich mortgages turning around – it will mean the market remains strong for sellers, with fewer needing to get out from under financial distress.”


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Highest seriously underwater share in Louisiana, Mississippi, Arkansas, West Virginia

States with the highest share of seriously underwater properties were Louisiana (20.7 percent); Mississippi (17.1 percent); Arkansas (16.3 percent); West Virginia (16.2 percent); and Illinois (16.2 percent).


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Among 99 metropolitan statistical areas analyzed in the report, those with the highest share of seriously underwater properties were Baton Rouge, Louisiana (21.3 percent); Scranton, Pennsylvania (20.0 percent); Youngstown, Ohio (19.2 percent); Toledo, Ohio (19.2 percent); and New Orleans, Louisiana (17.8 percent).

32 zip codes where more than half of all properties are seriously underwater

Among 7,639 U.S. zip codes with at least 2,500 properties with mortgages, there were 32 zip codes where more than half of all properties with a mortgage were seriously underwater, including zip codes in the Milwaukee, Trenton, Chicago, Saint Louis, and Cleveland metropolitan statistical areas.

The top five zip codes with the highest share of seriously underwater properties were 53206 in Milwaukee, Wisconsin (70.5 percent seriously underwater); 08611 in Trenton, New Jersey (68.9 percent); 69361 in Scottsbluff, Nebraska (63.4 percent); 60426 in Harvey, Illinois (63.1 percent); and 61104 in Rockford, Illinois (62.8 percent).

Highest equity rich share in California, Hawaii, New York, Washington, Vermont

States with the highest share of equity rich properties were California (43.0 percent); Hawaii (38.1 percent); New York (34.2 percent); Washington (33.2 percent); and Vermont (32.8 percent).

Among 99 metropolitan statistical areas analyzed in the report, those with the highest share of equity rich properties were San Jose, California (68.3 percent); San Francisco, California (58.4 percent); Los Angeles, California (48.1 percent); Santa Rosa, California (47.6 percent); and San Diego, California (39.3 percent).

408 zip codes where more than half of all properties are equity rich

Among 7,639 U.S. zip codes with at least 2,500 properties with mortgages, there were 408 zip codes where more than half of all properties with a mortgage were equity rich.

The top five zip codes with the highest share of equity rich properties were all located in the San Jose and San Francisco markets in California: 94040 in Mountain View (82.3 percent equity rich); 94116 in San Francisco (81.7 percent); 94087 in Sunnyvale (81.6 percent); 94085 in Sunnyvale (81.1 percent); and 94122 in San Francisco (81.0 percent).

Homes Are Becoming Less Affordable

According to a report from ATTOM Data Solutions, median home prices in the first quarter of 2019 were not affordable for average wage earners in 335 of 473 U.S. counties analyzed in the report (71 percent).

The report determined affordability for average wage earners by calculating the amount of income needed to make monthly house payments — including mortgage, property taxes and insurance — on a median-priced home, assuming a 3 percent down payment and a 28 percent maximum “front-end” debt-to-income ratio. That required income was then compared to annualized average weekly wage data from the Bureau of Labor Statistics.


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The 335 counties where a median-priced home in the first quarter was not affordable for average wage earners included Los Angeles County, California; Maricopa County (Phoenix), Arizona; San Diego County, California; Orange County, California; and Miami-Dade County, Florida.The 138 counties (29 percent of the 473 counties analyzed in the report) where a median-priced home in the first quarter was still affordable for average wage earners included Cook County (Chicago), Illinois; Harris County (Houston), Texas; Wayne County (Detroit), Michigan; Philadelphia County, Pennsylvania; and Cuyahoga County (Cleveland), Ohio.


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“We are seeing a housing market in flux across the United States, with a mix of tailwinds and headwinds that are pricing many people out of the housing market, but also are creating potentially better conditions for buyers,” said Todd Teta, chief product officer with ATTOM Data Solutions. “Continually rising home prices in many areas do remain a financial stretch – or simply unaffordable – for a majority of households.


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“However, quarterly wage gains have been outpacing prices increases for more than a year and mortgage rates are falling, which have helped make homes a bit more affordable now, than they’ve been in a year. Affordability may improve because of the simple fact that homes are out of reach for so many home seekers, suggesting that prices need to moderate up in order to attract buyers. Of course, a few quarters do not a long-term trend make. The economy could slow. The impact of last year’s tax cuts could fade, and interest rates could go back up, but the signs point to the possibility of an impending buyers’ market.”


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Home Seller Profit Hits 12-Year High

ATTOM Data Solutions released its Year-End 2018 U.S. Home Sales Report, which shows that home sellers in 2018 realized an average home price gain since purchase of $61,000, up from $50,000 last year and up from $39,500 two years ago in 2016 to the highest level since 2006 — a 12-year high.

That $61,000 average home seller profit represented an average 32.6 percent return on investment compared to the original purchase price, up from 27.0 percent last year and up from 21.9 percent in 2016 to the highest average home seller ROI since 2006.


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“While 2018 was the most profitable time to sell a home in more than 12 years, those along the coasts, reaped the most gains. However, those are the same areas where homeowners are staying put longer,” said Todd Teta, chief product officer at ATTOM Data Solutions. “The economy is still going strong and home loan rates remain historically low. But there are potential clouds on the horizon. The effects of last year’s tax cuts are wearing off as limits on homeowner tax deductions are in place and mortgage rates are ticking up ever so slowly, so this could dampen the potential for home price gains in 2019.”

Among 217 metropolitan statistical areas with a population greater than 200,000 and sufficient historical data, the highest returns on investment were almost exclusively in western states, with concentrations along areas of the west coast. Those with the highest average home seller ROI were San Jose, California (108.8 percent); San Francisco, California (78.6 percent); Seattle, Washington (70.7 percent); Merced, California (66.4 percent); and Santa Rosa, California (66.1 percent).


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“Home price growth in the Seattle area has started to soften, something that home buyers have been waiting for, and a trend that we can expect to continue in the coming year,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market. “Seattle is still benefitting from buyers moving here from more expensive markets, such as California, but the market cannot solely depend on this demographic. My forecast for 2019 is that it will be a year of movement back to balance, which is a very positive thing.”

Historical U.S. Home Seller Gains

San Jose and Las Vegas lead major metros in home price appreciation

The U.S. median home price in 2018 was $248,000, up 5.5 percent from 2017 to a new all-time high. Annual home price appreciation in 2018 slowed slightly compared to the 7.1 percent in 2017.


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Among 127 metropolitan statistical areas with a population of 200,000 or more and sufficient home price data, those with the biggest year-over-year increase in home prices were Mobile, Alabama (up 21 percent); Flint, Michigan (up 19 percent); San Jose, California (up 18.9 percent); Atlantic City, New Jersey (up 16.4 percent) and Las Vegas, Nevada (up 13.5 percent).

Along with San Jose and Las Vegas, other major metro areas with a population of at least 1 million with a double-digit percentage increase in home prices in 2018 were Grand Rapids, Michigan (up 10.6 percent); San Francisco, California (up 10.3 percent); Columbus, Ohio (up 10.1 percent); and Atlanta, Georgia (up 10.1 percent).

88 of the 127 metros (69 percent) reached new record home price peaks in 2018, including Los Angeles, Dallas-Fort Worth, Houston, Atlanta, and Boston.

Homeownership tenure at new record high nationwide, down in Vallejo, Reno, Tucson

Homeowners who sold in the fourth quarter of 2018 had owned their homes an average of 8.30 years, up from 8.13 years in the previous quarter and up from 7.95 years in Q4 2017 to the longest average home seller tenure as far back as data is available, Q1 2000.


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Average U.S. Homeownership Tenure

Counter to the national trend, 16 of the 108 metro areas analyzed in the report posted a year-over-year decrease in average home seller tenure including: Vallejo-Fairfield, California (down 5 percent); Reno, Nevada (down 3 percent); Redding, California (down 2 percent); Panama City, Florida (down 2 percent); Chattanooga, Tennessee (down 2 percent); Eugene, Oregon (down 2 percent); Crestview-Fort Walton Beach, Florida (down 1 percent); Tucson, Arizona (down 1 percent), Punta Gorda, Florida (down less than 1 percent); Manchester-Nashua, New Hampshire (down less than 1 percent); and Truckee, California (down less than 1 percent).

Nearly three in 10 home buyers made all-cash purchases in 2018

Nationwide all-cash purchases accounted for 27.8 percent of single-family home and condo sales in 2018, unchanged from 2017 but down from its peak in 2011 at 38.4 percent. However, this is still well above the pre-recession average of 18.7 percent between 2000 and 2007.

Among 200 metropolitan statistical areas with a population of at least 200,000 and sufficient cash sales data, those with the highest share of all-cash purchases in 2018 were Montgomery, Alabama (53.6 percent); Naples, Florida (52.5 percent); Macon, Georgia (50.8 percent); Cape Coral-Fort Myers, Florida (45.4 percent); and North Port-Sarasota, Florida (45.4 percent).

U.S. distressed sales share drops to 11-year low, up in 8 states

Distressed home sales — including bank-owned (REO) sales, third-party foreclosure auction sales, and short sales — accounted for 12.4 percent of all U.S. single family home and condo sales in 2018, down from 14.0 percent in 2017 and down from a peak of 38.6 percent in 2011.

Counter to the national trend, the share of distressed sales increased in 2018 in Kansas (up 13 percent); Louisiana (up 13 percent); Wisconsin (up 2 percent); Kentucky (up 2 percent); Maine (up 1 percent); Colorado (up 1 percent); Indiana (up 1 percent); and West Virginia (up 1 percent).

Among 209 metropolitan statistical areas with a population of at least 200,000 those with the highest share of distressed sales in 2018 were Atlantic City, New Jersey (37.2 percent); Montgomery, Alabama (25.2 percent); Trenton, New Jersey (23.8 percent); Youngstown, Ohio (23.6 percent); and Rockford, Illinois (22.1 percent).

Among 53 metropolitan statistical areas with a population of at least 1 million, those with the highest share of distressed sales in 2018 were Philadelphia, Pennsylvania (20.7 percent); Baltimore, Maryland (19.9 percent); Cleveland, Ohio (19.4 percent); Memphis, Tennessee (19.1 percent); and Providence, Rhode Island (18.3 percent).

U.S. Total Distressed Sales

Institutional investors dropped for the fifth straight year

Institutional investors nationwide accounted for 2.7 percent of all single-family home and condo sales in 2018, down from 3.0 percent in 2017.

Among 200 metropolitan statistical areas with a population of at least 200,000 and sufficient institutional investor sales data, those with the highest share of institutional investor sales in 2018 were Montgomery, Alabama (9.6 percent); Memphis, Tennessee (8.1 percent); Columbia, South Carolina (7.6 percent); Birmingham, Alabama (7.1 percent); Atlanta, Georgia (7.0 percent); and Charlotte, North Carolina (6.5 percent).

Historical U.S. Home Sales By Type

Texas metro areas dominated list with the most FHA sales in 2018

Nationwide buyers using Federal Housing Administration (FHA) loans accounted for 10.6 percent of all single-family home and condo purchases in 2018, down from 13.6 percent in 2017 to the lowest level since 2007.

Among 200 metropolitan statistical areas with a population of at least 200,000 and sufficient FHA buyer data, 6 out of the top 10 metro areas with the highest share of FHA sales were in Texas. Those with the highest share of FHA buyers in 2018 were McAllen, Texas (26.3 percent); El Paso, Texas (25.3 percent); Amarillo, Texas (23.0 percent); Beaumont-Port Arthur, Texas (22.7 percent); and Elkhart, Indiana (21.5 percent).

Foreclosures Drop To 13-Year Low

ATTOM Data Solutions released its Year-End 2018 U.S. Foreclosure Market Report, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 624,753 U.S. properties in 2018, down 8 percent from 2017 and down 78 percent from a peak of nearly 2.9 million in 2010 to the lowest level since 2005.


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Those 624,753 properties with foreclosure filings in 2018 represented 0.47 percent of all U.S. housing units, down from 0.51 percent in 2017 and down from a peak of 2.23 percent in 2010 to the lowest level since 2005.


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ATTOM’s year-end foreclosure report provides a unique count of properties with a foreclosure filing during the year based on publicly recorded and published foreclosure filings collected in more than 2,500 counties nationwide, with address-level data on more than 23 million foreclosure filings historically also available for license or customized reporting. See full methodology below.


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The report also includes new data for December 2018, when there were 52,069 U.S. properties with foreclosure filings, down 2 percent from the previous month and down 19 percent from a year ago — the 6th consecutive month with a year-over-year decrease in foreclosure activity.


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“Plummeting foreclosure completions combined with consistently falling foreclosure timelines in 2018 provide evidence that most of the distress from the last housing crisis has now been cleaned up,” said Todd Teta, Chief Product Officer. “But there was also some evidence of distress gradually returning to the housing market in 2018, with foreclosure starts increasing from the previous year in more than one-third of all state and local housing markets. 

“Some of that distress was driven by natural disasters, most notably in Houston, where foreclosure starts increased 61 percent,” Teta continued. “But natural disasters do not explain the increase in markets such as Detroit, Minneapolis-St. Paul, Milwaukee and Austin — all of which posted double-digit percentage increases in foreclosure starts in 2018.”

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Foreclosure Activity Is Down 8% From A Year Ago, Lowest Level Since Q4 2005

ATTOM Data Solutions released its Q3 2018 U.S. Foreclosure Market Report, which shows a total of 177,146 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — in the third quarter, down 6 percent from the previous quarter and down 8 percent from a year ago to the lowest level since Q4 2005 — a nearly 13-year low.


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U.S. foreclosure activity in Q3 2018 was 36 percent below the pre-recession average of 278,912 properties with foreclosure filings per quarter between Q1 2006 and Q3 2007 — the eighth consecutive quarter where U.S. foreclosure activity has registered below the pre-recession average.


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“A decade after poorly underwritten mortgages triggered a housing market crash, it’s clear that the foreclosure risk associated with those problem mortgages has faded — average foreclosure timelines have dropped to a two-year low, and the share of foreclosures tied to 2004-to-2008 loans has dropped well below 50 percent,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “The biggest foreclosure risk in today’s housing market comes from natural disaster events such as the twin hurricanes of a year ago. Foreclosure starts spiked in the third quarter in many local markets impacted by those hurricanes. Secondarily, we are seeing relatively modest — but more widespread — foreclosure risk associated with FHA loans originated in 2014 and 2015.”


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Lenders started the foreclosure process on 91,849 U.S. properties in Q3 2018, down 6 percent from the previous quarter and down 3 percent from a year ago — the 13thconsecutive quarter with a year-over-year decrease in foreclosure starts.

Counter to the national trend, 15 states posted year-over-year increases in foreclosure starts in Q3 2018, including Florida (up 25 percent); Texas (up 3 percent); Maryland (up 13 percent); Michigan (up 32 percent); and Missouri (up 10 percent).

Also counter to the national trend, 79 of 219 metropolitan statistical areas analyzed in the report (36 percent) posted a year-over-year increase in foreclosure starts in Q3 2018, including Los Angeles, California (up 2 percent); Houston, Texas (up 51 percent); Washington, D.C. (up 2 percent); Miami, Florida (up 29 percent); and Detroit, Michigan (up 65 percent).

Other markets with at least 1 million people and a year-over-year increase of at least 15 percent in foreclosure starts in Q3 2018 were Minneapolis-St. Paul, Minnesota; Tampa-St. Petersburg, Florida; St. Louis, Missouri; Orlando, Florida; Las Vegas, Nevada; Austin, Texas, Milwaukee, Wisconsin; Jacksonville, Florida; and Grand Rapids, Wyoming.

Refinances Drop 21% In Q3 2018

ATTOM Data Solutions released its Q3 2018 U.S. Residential Property Mortgage Origination Report, which shows that 681,455 refinance mortgages secured by residential property (1 to 4 units) were originated in the third quarter, down 15 percent from the previous quarter and down 21 percent from a year ago to the lowest level as far back as data is available — Q1 2000.

The refinance mortgages originated in Q3 2018 represented an estimated $175.1 billion in total dollar volume, down 14 percent from the previous quarter and down 21 percent from a year ago to the lowest level since Q1 2014 — a 4.5-year low.

“Rising mortgage rates continued to dampen demand for mortgages in the third quarter, particularly refinance mortgages,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “There were some notable exceptions to that trend, primarily in markets affected by the hurricanes in the third quarter of 2017.”

Refinance originations increase in Houston, Miami, Tampa

Residential refinance mortgage originations decreased from a year ago in 197 of the 225 metropolitan statistical areas analyzed in the report (88 percent), including Los Angeles (down 31 percent); New York (down 11 percent); Dallas-Fort Worth (down 5 percent); Phoenix (down 14 percent); and Atlanta (down 33 percent).

Counter to the national trend, residential refinance mortgage originations increased from a year ago in 28 of the 225 metro areas analyzed in the report (12 percent), including Houston (up 69 percent); Miami (up 29 percent); Tampa-St. Petersburg (up 33 percent); San Antonio (up 3 percent); and Orlando (up 30 percent).


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Purchase mortgage originations down 2 percent from year ago

Lenders originated 892,760 residential purchase mortgages in Q3 2018, down 5 percent from the previous quarter and down 2 percent from a year ago.


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Residential purchase mortgage originations decreased from a year ago in 121 of the 225 metropolitan statistical areas analyzed in the report (54 percent), including New York (down 6 percent); Dallas-Fort Worth (down 5 percent); Chicago (down 14 percent); Phoenix (down 2 percent); and Los Angeles (down 14 percent).

Counter to the national trend, residential purchase mortgage originations increased from a year ago in 104 of the 225 metro areas analyzed in the report (46 percent), including Atlanta (up 12 percent); Houston (up 3 percent); Miami (up 2 percent); Tampa-St. Petersburg (up 3 percent); and Nashville (up 1 percent).

HELOC originations down 11 percent from year ago

A total of 313,744 Home Equity Lines of Credit (HELOCs) were originated on residential properties in Q3 2018, down 14 percent from the previous quarter and down 11 percent from a year ago.


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Residential HELOC mortgage originations decreased from a year ago in 150 of the 225 metropolitan statistical areas analyzed in the report (67 percent), including New York (down 14 percent); Los Angeles (down 18 percent); Seattle (down 3 percent); Chicago (down 27 percent); and Philadelphia (down 16 percent).

Counter to the national trend, residential HELOC mortgage originations increased from a year ago in 73 of the 225 metro areas analyzed in the report (32 percent), including Miami (up 4 percent); Tampa-St. Petersburg (up 22 percent); Kansas City (up 20 percent); Orlando (up 3 percent); and Omaha (up 11 percent).

Median down payment percentage at nearly 15-year high

The median down payment on single family homes and condos purchased with financing in Q3 2018 was $20,250, up 7 percent from the previous quarter and up 16 percent from a year ago to a record high as far back as data is available, Q1 2000.

The median down payment as a percentage of the median home sales price in Q3 2018 was 7.6 percent, up from 7.2 percent in the previous quarter and up from 6.8 percent in Q3 2017 to the highest since Q4 2003 — a nearly 15-year high.

Among 96 metropolitan statistical areas analyzed in the report for down payments, those with the highest median down payment as a percentage of median home sales price in Q3 2018 were San Jose, California (24.7 percent); San Francisco, California (23.3 percent); Los Angeles, California (20.6 percent); Oxnard-Thousand Oaks-Ventura, California (19.0 percent); and Fort Collins, Colorado (18.6 percent).

FHA loan share increases from more than 10-year low in previous quarter

Residential loans backed by the Federal Housing Administration (FHA) accounted for 10.5 percent of all residential property loans originated in Q3 2018, up from a more than 10-year low of 10.2 percent in the previous quarter but still down from 12.5 percent a year ago.

Residential loans backed by the U.S. Department of Veterans Affairs (VA) accounted for 5.5 percent of all residential property loans originated in Q3 2018, up from 5.4 percent in the previous quarter but still down from 6.6 percent a year ago.

Home Flips Reach 3.5-Year Low

According to data from ATTOM Data Solutions, its Q3 2018 U.S. Home Flipping Report shows that a total of 45,901 U.S. single family homes and condos were flipped in the third quarter of 2018, down 12 percent from a year ago to the lowest level since Q1 2015 — a 3.5-year low.


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Homes flipped in Q3 2018 represented 5.0 percent of all single family home and condo sales during the quarter — down from a 5.2 percent home flipping rate in Q2 2018 and down from a 5.1 percent home flipping rate in Q3 2017 to the lowest level since Q3 2016.

“Home flipping acts as a canary in the coal mine for a cooling housing market because the high velocity of transactions provides home flippers with some of the best and most real-time data on how the market is trending,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “We’ve now seen three consecutive quarters with year-over-year decreases in home flips. The last time that happened was in 2014 following the mortgage rate jump in the second half of 2013, but it’s still far from the 11 consecutive quarters with year-over-year decreases in home flips extending from Q2 2006 through Q4 2008 and leading up to the last housing crash.”


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Homes flipped in Q3 2018 sold for an average of $63,000 more than what the home flipper purchased them for, down from an all-time high average gross flipping profit of $68,000 in the first quarter and down from an average gross flipping profit of $65,000 a year ago to the lowest level since Q2 2016.

The average gross flipping profit of $63,000 in Q3 2018 represented an average 42.6 percent gross flipping return on investment, down from an average 44.1 percent gross flipping ROI in the previous quarter and down from an average 48.1 percent gross flipping ROI in Q3 2017 to the lowest level since Q1 2012 — a 6.5-year low.


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The share of homes flipped that were sold by the home flipper between $100,000 to $200,000 made up 31.6 percent of all flipped sales, while those flip sales that occurred on homes sold for more than $5 million saw the highest gross flipping return on investment (ROI) of any price range.

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Equity Rich Properties Represent 25.7% Of U.S. Properties

ATTOM Data Solutions released its Q3 2018 U.S. Home Equity & Underwater Report, which shows that in the third quarter of 2018, nearly 14.5 million U.S. properties were equity rich — where the combined estimated amount of loans secured by the property was 50 percent or less of the property’s estimated market value — up by more than 433,000 from a year ago to a new high as far back as data is available, Q4 2013.


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The 14.5 million equity rich properties in Q3 2018 represented 25.7 percent of all properties with a mortgage, up from 24.9 percent in the previous quarter but down from 26.4 percent in Q3 2017.


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The report also shows more than 4.9 million U.S. properties were seriously underwater — where the combined estimated balance of loans secured by the property was at least 25 percent higher than the property’s estimated market value, representing 8.8 percent of all U.S. properties with a mortgage. That 8.8 percent share of seriously underwater homes was down from 9.3 percent in the previous quarter but still up from 8.7 percent in Q3 2017.


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“As homeowners stay put longer, they continue to build more equity in their homes despite the recent slowing in rates of home price appreciation,” said Daren Blomquist, senior vice president with ATTOM Data Solutions. “West coast markets along with New York have the highest share of equity rich homeowners while markets in the Mississippi Valley and Rust Belt continue to have stubbornly high rates of seriously underwater homeowners when it comes to home equity.”

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