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44 MORTGAGED PROPERTY LISTINGS SEE HUGE DECLINES Mortgaged properties for sale have seen huge declines in recent years, and the driving force behind the decrease is the declines in non- current inventory and noncurrent listing share. Using both loan-level mortgage performance and multiple listing service (MLS) data, Black Knight Financial Services' Mortgage Monitor report for April 2016 examined the correlation between mortgage characteristics and the likelihood a property will be listed and/or sold. e report found that delinquent inventory is having a significant impact on available housing market inventory. "We're now in the heart of the spring home buying season and, as has been true for several years, there are still reports of tight inventory," said Black Knight Data & Analytics SVP Ben Graboske. Black Knight reported that the share of homes with mortgages listed for sale is down 22 percent since 2012 and down 5 percent from the same time last year. "One driver is that while delinquent borrowers are still more than twice as likely to list their homes for sale, there are far fewer of these borrowers, as well as a much lower share of such homes listed for sale, than in 2012," Graboske said. e report noted that declines in non-current inventory and noncurrent listing share have been a driving factor in the overall decline in mortgaged properties listed for sale. Overall noncurrent inventory is down 500,000 from last year as of March and down 3 million from March 2012. Black Knight found that the share of non-current mortgaged properties listed for sale has declined from 7.7 percent in 2012 to 3.4 percent in 2016. e share of borrowers that are current on their mortgages and have their property listed for sale is relatively flat from last year and up 10 percent from 2012, but the report said "that increase hasn't been enough to overcome the decline in non-current listings, contributing to a further tightening of inventory." ose with adjustable-rate mortgages (ARMs) are more likely to list their homes than those with fixed rates, which is hardly surprising given that buyers often choose ARMs when they plan to stay in their homes for less time. However, borrowers with low fixed interest rates of 4.25 percent or below are less likely to put their homes on the market than those with higher rates. "is is something to keep an eye on if and when interest rates begin to rise. Should the trend hold true, rising interest rates could put an even greater strain on an already tight housing inventory." Graboske explained. TIGHT INVENTORY CAUSES A SLIP IN DEMAND With fewer homes for sale on the market over the past year, housing demand has also experienced a decline, according to Redfin's Housing Demand Index. e index, which is the first and only measure of homebuyer activity prior to purchase, and is based on millions of visits to Redfin.com home-listing pages and thousands of Redfin customers requesting tours and writing offers in 15 major metro areas, decreased 4.9 percent to 118 in April, the fifth consecutive month of year- over-year declines, Redfin reported. Demand appeared to high in the early stages, with the number of Redfin customers requesting tours up 19.8 percent year-over-year, up from the 17.7 percent increase recorded in March. It was later in the process where demand experienced a downturn, with a 6.7 percent year-over-year drop in the number of customers writing offers in April. "Timing is everything in today's market," said Nela Richardson, Redfin Chief Economist. "Even though it's a seller's market, a lot of sellers are also buyers who are risk averse as they confront an inventory drought while finding their next home. As sellers, they're often taking the sure bet over the highest offer, whether it's all cash or a lender guaranteeing a quick close. Only people with time wrangle up the price." Home prices were up 5 percent in April compared to a year ago as sales grew 1.3 percent across the 15 metro areas measured by the Demand Index. Redfin reported that April marks a year of consistently falling inventory as the total number of homes for sale fell 2.2 percent. In addition, new listings were mostly flat, down 0.3 percent from last year. e report also showed that 63 percent of offers Redfin agents wrote faced bidding wars last month. is number aligned exactly with last year's frequency. On the other hand, 29.6 percent of homes sold for more than their asking price, the highest level recorded since August 2013. Typically, homes stayed on the market for just 17 days, four days fewer than last year. Homes in Denver, the fastest market, went under contract in a median five days. In Portland and Seattle, buyers had just a little more time as the typical home took a week to sell. "Even with fewer buyers making offers than last year, the persistent depletion of supply made the market extremely competitive for those who bid on homes," Redfin said. Approximately 6.8 percent of all residential home sales in March 2016 were REO sales, which is less than a third of the REO share at its peak reached in January 2009 (27.9 percent), according to CoreLogic. 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