The challenge is that both headlines are 100% accurate. How can foreclosures have increased for the first time in two years and, at the same time, be at a six year low? Each headline was reporting on a different measurement. Below are the explanations for each of the measurements as per RealtyTrac’s most recent Mortgage Foreclosure Report.

Foreclosure Starts

Foreclosure starts are the first steps taken by the bank after the borrower becomes delinquent on their mortgage payments (default notices or scheduled foreclosure auctions, depending on the state). They were filed for the first time on 77,494 U.S. properties in November. This was:

• Down 13% from the previous month
• Down 28% from November 2011
• At the lowest level since December 2006

Foreclosures (Bank Repossessions)

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Freddie: Great Expectations for Housing in 2013

The housing market is expected to continue its rise in the New Year, according to Freddie Mac’s U.S. Economic and Housing Market Outlook for December. 

Continuing to keep home affordability low, mortgage rates will likely remain near their record lows in the first half of 2013, Freddie Mac reports. However, the all-time low rates are expected to start inching up slowly during the second half of the year. 

Still, mortgage rates are expected to stay below 4 percent, Freddie Mac reports. 

Some other forecasts for the housing market in 2013, according to Freddie Mac’s report:

• Home values are expected to increase 2 to 3 percent next year. 
• Household formation is expected to increase to a net 1.20 million to 1.25 million household in 2013. Housing starts are expected to reach near the 1 million annualized pace by the fourth quarter.
• Vacancy rates are expected to drop to 2002 and 2003 levels for apartments and single-family homes for-sale “as household formation outpaces new construction.” 

"The last few months have brought a spate of favorable news on the U.S. housing market with construction up, more home sales, and home-value growth turning positive,” says Frank Nothaft, Freddie Mac’s chief economist. “This has been a big change from a year ago, when some analysts worried that the looming 'shadow inventory' would keep the housing sector mired in an economic depression. Instead, the housing market is healing, is contributing positively to GDP and is returning to its traditional role of supporting the economic recovery."

Source: Freddie Mac

There are still those questioning whether the housing market is truly making a comeback. We have decided to graph home sales over the last two years based on the National Association of Realtor‘s Pending Home Sales Report. We believe the graph removes all doubt.

The methodology for the report as per NAR:

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November 2012 Market Trends Report: Significant Annual Gains in Loudoun County Home Sales and Pricing

c/o Dulles Area Association of Realtors

(http://www.dullesarea.com/)