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31 » VISIT US ONLINE @ DSNEWS.COM GDP CONTRACTS IN FINAL Q1 ESTIMATE, BUT MAJORITY OF LENDERS REMAIN OPTIMISTIC e nation's real gross domestic product (GDP) declined at the annual rate of 0.2 percent for Q1, according to the Bureau of Economic Analysis (BEA)'s third and final estimate for the quarter released in late June. While the economy contracted in the final estimate, which is based on more complete source data than were available for the first two estimates, it was still an improvement over the second estimate of minus 0.7 percent released in May. In the third estimate for Q1, exports decreased less than previously estimated while personal consumptions and expenditures increased more than previously estimated, according to the BEA. In the fourth quarter last year, real GDP increased at an annual rate of 2.2 percent. "e decrease in real GDP in the first quarter primarily reflected negative contributions from exports, nonresidential fixed investment, and state and local government spending that were partly offset by positive contributions from PCE, private inventory investment, and residential fixed investment," the BEA said in its report. According to Fannie Mae's National Housing Survey for May 2015 released shortly before the BEA's final estimate, the majority of mortgage lenders—61 percent—believe the economy is on the right track, while 29 percent said they believed it is on the wrong track. "is sanguine view of the economy is held by mortgage lenders of all sizes, larger institutions, mid-sized institutions, and smaller institutions," said Michael Neal, senior economist with the National Association of Home Builders (NAHB). While more than half of lenders said they thought the economy is on the right track, Neal said, "However, a greater proportion of mid- sized lenders reported this kind of optimism. Furthermore, while still holding optimistic views, a greater percentage of larger institutions than smaller institutions believe that the U.S. economy is on the 'wrong track.' Smaller lenders were more likely to be unsure of current economic conditions." Many consumers did not share the same sentiment regarding the economy as mortgage lenders. Only 38 percent of consumers said they believe the U.S. economy is on the right track, compared with 52 percent who said they believe it is on the wrong track, according to Fannie Mae's survey. But according to Neal, "Improving labor market conditions and income growth should help improve consumer moods." NON-CURRENT INVENTORY, FORECLOSURE STARTS, AND DELINQUENCIES ALL RISE MONTH-OVER-MONTH Month-over-month increases in foreclosure starts, non-current residential housing inventory, and mortgage delinquencies took place in May, according to Black Knight Financial Services' First Look at Mortgage Data for May 2015 in June. Non-current inventory, which is comprised of all residential properties 30 days or more delinquent or in foreclosure, totaled approximately 3.3 million in May, an increase of about 89,000 from April, according to Black Knight. It was the second consecutive month- over-month increase in non-current inventory; despite this, May's total was down by more than half a million (537,000 loans) from a year earlier. e state with the largest six-month improvement in non-current inventory was Florida, which had a non-current inventory of 8.31 percent in May, a 22 percent improvement from six months earlier. e delinquency rate, which is the percentage of properties 30 days or more overdue but not in foreclosure, represented 4.96 percent of all residential mortgage loans nationwide in May, a 4 percent increase from April. May marked the second consecutive month-over-month increase in delinquency rate. Overall, the number of delinquent mortgages jumped by 98,000 up to about 2.5 million in May. Despite the increase in delinquent loans for the last two months, the delinquency rate is still down by 12 percent from a year ago and is at its lowest point since the summer of 2007, according to Black Knight. Foreclosure starts climbed by 11 percent nationwide from April to May, from 73,500 up to 81,900, just one month after declining by nearly 22 percent from March to April. e foreclosure pre-sale inventory rate ticked slightly downward month-over-month by about 10,000 properties to 754,000 in May, representing 1.49 percent of all mortgages nationwide. May's foreclosure inventory total represented a decline of about 212,000 properties (22 percent) from year-over-year, according to Black Knight.

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