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Freddie Mac Home Sales Warming Up

SVP Chris Bowden Are America's housing markets warming up? The evidence from our own experience as a national seller of foreclosed (real estate owned, or REO) homes suggests they just might be.

HomeSteps, Freddie Mac's REO sales division, sold more REO than it took in during the second quarter and continued to reduce its national inventory of foreclosed homes. Specifically, as the chart below shows, sales outpaced acquisitions by 6,041 homes and the inventory fell to 53,282 at the end of the second quarter.

Freddie Mac Selling More Homes Than it Takes In

Freddie Mac Selling More Homes Than it Takes In

Source: Freddie Mac

This continues trends we saw building back in 2011 when HomeSteps sold 11,538 more homes than it took in. Last year, our inventory shrank from 72,093 to 60,555 homes. In fact, our national inventory of homes has shrunk nearly 30 percent from its post-crisis peak of approximately 75,000 homes in the third quarter of 2010.

As Sales Rise, HomeSteps' Inventory Shrinks – Down 30% from its 2010 Peak

As Sales Rise, HomeSteps' Inventory Shrinks - Down 30% from its 2010 Peak

Source: Freddie Mac

More evidence is anecdotal. HomeSteps markets homes through a national network of licensed brokers, who are increasingly telling us about bidding wars in Southern California, Phoenix, and other markets that were once synonymous with the housing crisis. On average, HomeSteps homes are selling for 96 percent of market value and being snapped up after less than 120 days on the market.

Does this mean the housing industry is out of the woods? It's far too early to make that claim, and some indicators are still weak (for instance, pending home sales were down in the early summer). But other widely reported data show a steady rise in home prices and confidence among homebuilders, Realtors, and consumers. One thing is clear based on our second quarter sales: The market certainly feels warmer than any market we've seen over the past four years.

(For more information about buying a HomeSteps home, visit homesteps.com.)


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