Skip to main content

NEW YORK (MainStreet) – Mortgage delinquencies are down but foreclosures are up, making it difficult to answer the recurring question: Is the housing market getting any better?

According to the market research firm Lender Processing Services, the mortgage delinquency rate for January 2012 fell 10% for the month – a good sign for the economy and for the housing sector.

LPS says the national delinquency rate declined to 7.97%, which is a 10.5% annual slide and a 2.2% decline from December 2012.

But the news on the foreclosure front isn’t as optimistic. LPS reports that there are approximately 2 million U.S. homes in pre-foreclosure, and the number of U.S. homes either 30 days delinquent or in foreclosure topped 6 million.

Regionally, the states where homeowners are having the toughest time keeping up with their mortgage loans include Florida, Nevada, New Jersey and Illinois. The states where homeowners are faring the best include Alaska, Wyoming, North Dakota and South Dakota.

The rest of the week should fill in the blanks on where the housing market really stands. Later today, the existing home sales index is due out, and economists expect that number to grow slightly (by approximately 1.9%). On Thursday, the weekly jobless claims come out, a number that has been trending favorably in recent weeks. Also on Thursday, monthly home prices hit the wires, and on Friday new homes sales number comes out – analysts expect that index to rise by around 2.6%.

Scroll to Continue

TheStreet Recommends

One ongoing theme that has stopped a real housing recovery in its tracks is the imbalance between housing inventory and housing demand.

In a Feb. 10 speech to the National Association of Homebuilders in Orlando, Fla., Federal Reserve Chairman Ben Bernanke said as much, telling his audience that he was bullish on a housing recovery, but that such a recovery would take some time.

“One way to understand conditions in the housing market is to focus on the balance of supply and demand,” Bernanke said. “For the past few years, the actual and potential supply of single-family homes has greatly exceeded the effective demand. The elevated number of homes that are currently vacant instead of owner occupied reflects the imbalance.”

To accelerate that process and restore some much-needed balance to the housing sector, foreclosures are going to have to play out, Bernanke says. Ironically, the more foreclosures on the books (for the short term, at least), the better for homeowners. That means fewer houses on the market and less inventory for homebuyers looking for a bargain.

Again, Bernanke preached patience on this front: “Looking ahead, the relatively high rate of foreclosures is likely to continue for a while, putting additional homes on the market and dislocating families and disrupting communities in the process.”

As far as how the housing market is faring right now, the short answer is that it’s standing on firmer ground, but it still has a ways to go before it moves forward on an accelerated basis.