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48 BANK FORECLOSURES LISTED FAR BELOW REGIONAL SELLING PRICES RealtyStore, a provider of a broad variety of real estate listings, recently released a report outlining average selling prices for bank foreclosures. e company found the median price of bank foreclo- sures for sale in six select states list at an average of nearly 50 percent below recent median existing- home sale prices. e states—Maryland, Massachusetts, Mis- sissippi, Missouri, Nevada, and New Jersey—were cited by the company as having the highest percent- ages of mortgages in default, past due 90 days or more as of the end of Q1 2014. Due to their higher default rates, these states pose a greater risk of add- ing "significant amounts" of REO inventory. e company believes these newly added foreclosed properties could put further downward pressure on already depressed REO prices. "Dramatic differences in the default level have been noted across the country's regions. While the far West (California and Arizona) and the deep South (Florida) contained the largest number of mortgage defaults and foreclosures in recent years, loan default activity has spread to different states and regions," the company said. e Northeast had a large share of properties that are 90 days or more past due. Massachusetts and New Jersey topped the list with more than 3 percent of mortgages. Maryland was close behind, posting roughly 3 percent of home loans 90 days or more past due. Mississippi led the South and the entire country with default rates topping 4 percent. "Using these high default states as focal points, RealtyStore analyzed the price points on current standing inventory of REO listings across each state. Results show the median list prices in each state gravitate to the low end of the price spectrum. On a regional basis, the median REO list prices range from 41 percent to 62 percent below their median existing-home sales prices in April," the company found. e report suggested that a "material opportu- nity" exists for homebuyers interested in moving to lower-cost markets or investing in low-cost local real estate. YOUNG ADULTS AGING OUT OF FOSTER CARE FACE UNIQUE HOUSING CHALLENGES As the housing market continues to mend, bringing hope to many formerly underwater homeowners or others who simply hoped for a good return on their investments, at least one group of young Americans has seen no relief in the improv- ing market. HUD released a report chronicling the challenges young adults aging out of foster care face in finding safe, affordable housing. Youth are no longer eligible for foster care when they reach either age 18 or 21, depending on their location. When they age out of the program, many lack the resources necessary to find and obtain safe, stable housing, according to HUD. In 2010, close to 28,000 youth aged out of foster care and had to find housing "with little or no support from either their family or the state," according to HUD. Regional studies estimate between 11 and 37 percent of these youth end up homeless at some point. "Studies estimate that 25 to 50 percent of young adults exiting care couch surf, double up, move fre- quently within a short period of time, have trouble paying rent, and face eviction," HUD stated. With little or no credit history and no rental history, landlords may be reluctant to rent to these youth, according to HUD. Even more of a hin- drance, "ose who exit foster care before age 18 cannot legally sign a lease," HUD reported. Furthermore, affordability is a common issue for these youth who are finding themselves on their own for the first time, perhaps now more than ever. HUD secretary Shaun Donovan recently said, "is is the worst rental affordability crisis this country has ever known." While a smattering of programs exist that can help former foster children obtain housing, the HUD report revealed these youth sometimes get overlooked even in these programs. e Family Unification Program subsidizes housing for families and youth. However, the program appears to focus more on families with children than young adults in need of housing. In fact, young adults accounted for just 14 percent of those helped through the Family Unification Program last year. "Current research on the outcomes of youth aging out of foster care points to a real need for policy and programs to assist them in maintaining housing and preparing for self-sufficiency," HUD stated in its report. HUD recommends "rigorous evaluations" of current programs in order to determine what types of programs best meet these youths' needs. PENDING HOME SALES CREEP UP 0.4% IN APRIL Pending home sales ticked up again in April, signaling further sales growth to kick off summer. e National Association of Realtors (NAR) recorded a 0.4 percent gain in its Pending Home Sales Index (PHSI) for April, bringing it up to 97.8. A measure of contract signings, the index serves as a forward-looking indicator for future sales activity. "Higher inventory levels are giving buyers more choices, and a slight decline in mortgage interest rates this spring is raising prospective buyers' confidence," said Lawrence Yun, chief economist at NAR. Compared to last year, pending sales were still slow, falling 9.2 percent from April 2013 as rising housing costs and diminished supply hinder buyers. With activity just now starting to pick up after a weak first quarter, the group expects annual existing-home sales this year to come in "modestly below" last year's total of 5.1 million before recovering to an anticipated 5.3 million next year. However, with mortgage rates and home prices still trending upward, Yun says sales conditions will also depend on income growth to match those increases, along with changes in the labor market and in mortgage underwriting conditions. "An uptrend in closed sales is expected, although some months will encounter a modest setback," he said. A pickup would be welcome news for the existing single-family home market, which saw sales steadily decline until finally improving in April for the first time this year. Around the country, pending sales bumped up 0.6 percent in the Northeast and 5 percent in the Midwest compared to March. ose increases were offset slightly by declines of 0.6 percent and 2.9 percent in the South and West. Relative to April 2013, sales numbers were down in all regions, with declines ranging from 6.4 percent in the South to 15 percent in the West.

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