Homeowners who have been struggling thanks to the sluggish housing market received a little more relief in October as the sector continued to improve, and government initiatives grew more effective.
In all, efforts from the federal government led to more than 972,000 troubled homeowners receiving some sort of assistance so far this year as a result of their homes being underwater, according to the latest Housing Scorecard from the U.S. Department of Housing and Urban Development, and the U.S. Department of the Treasury. The majority of those have come in the form of altered mortgage terms through the Home Affordable Refinance Program.
Through HARP, the roughly 2,000 people who refinanced their homes in October were able to take advantage of new lower rates on 30-year fixed-rate mortgages, which slipped to an average of 3.39 percent from the previous month’s 3.41 percent, the report said. A year ago at that time, the rate stood at 4 percent, and was as high as 5.1 percent in December 2008.
Further, the Federal Housing Administration also offered more than 1.5 million owners some sort of loss mitigation or interventions on early delinquency so far in 2012, which likewise adds relief for troubled borrowers, the report said. The HOPE Now initiative has also granted more than 3 million homeowners mortgage modifications through the end of August.
“As the October housing scorecard indicates, our housing market is continuing to show important signs of recovery – with the FHFA housing price index posting its largest annual gain in five years and new home sales at its fastest pace since April 2010,” said HUD acting assistant secretary for policy development and Research Erika Poethig. “But with so many households still struggling to make ends meet, we have important work ahead. That is why we are asking the Congress to approve the President’s refinancing proposal so that more homeowners can receive assistance.”
So far this year, continual improvements in home prices have helped 1.3 million owners move back above water on their mortgages, the report said. However, officials also believe that because the improvements have been so incremental, the housing market is still also somewhat in danger of sinking back into a slump once again.
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Experts generally believe that home prices will continue to appreciate throughout much of the next year, which could lead to increased interest in selling.
Image: Cristiano Betta, via Flickr