Weak home prices and an uptick in foreclosure completions weighed down the housing market in January, dampening optimism fueled by better sales and construction numbers last month.
Housing statistics collected in the January Housing Scorecard, released Monday by the Department of Housing and Urban Development and the Department of the Treasury, underscored the persistent fragility of the housing market and the lukewarm outlook for significant improvement in 2012.
"While we should be encouraged by the positive trends on inventories and foreclosure starts, the mixed overall outlook means that we must remain diligent to improve conditions in the nation's housing market," said HUD Assistant Secretary Raphael Bostic in a release.
Home values continued to slide in January, according to the S&P/Case-Shiller indices, and projections for improvement remain flat. Foreclosure completions saw an increase to about 62,000, up from around 56,000 in December, but down about 9,000 from last year.
Still, there were some bright spots. The number of existing homes for sale dropped from 3.2 million in the second quarter of 2011 to 2.4 million in the fourth quarter, the report said, showing early signs that the market could be working through some of the supply overhang that has been keeping prices stagnant.
The number of homes kept off the market declined slightly, from about 3.9 million in the first quarter of 2011 to 3.6 million in the fourth quarter.
On the mortgage finance front, the report alludes to recent proposals by the Obama administration to broaden federal programs aimed at helping struggling homeowners.
According to the report, nearly a million homeowners have benefited from permanent mortgage modifications under the Home Affordable Modification Program and "the impact of recently-announced enhancements to HAMP to broaden the pool of eligible homeowners, protect tenants at risk of displacement due to foreclosure and provide more robust relief to underwater homeowners will be captured in the Housing Scorecard over the coming months."
Check out the full report here.