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U.S. home sales surged to their highest level in nearly 14 years in August as the housing market continued to outperform the overall economy, but record high home prices could squeeze first-time buyers out of the market, Reuters reported. The report from the National Association of Realtors confirmed home sales had recovered after slumping when the economy almost ground to a halt as businesses were shuttered in mid-March in an effort to slow the spread of COVID-19. Existing home sales increased 2.4% to a seasonally adjusted annual rate of 6 million units last month, the highest level since December 2006. August’s increase in homes sales, which marked three straight months of gains, was in line with economists’ expectations. The median existing house price jumped 11.4 percent from a year ago to a record $310,600 in August. Sales last month were concentrated in the $250,000 to $1 million and over price range, with transactions below the $250,000 price band down sharply.

Americans with mortgages have accumulated nearly $10 trillion in home equity thanks to a decade of rising home prices. Yet millions of them have fallen behind on mortgage payments and risk losing their houses, the Wall Street Journal reported. It is a potential bonanza for rental-home investors. Since the coronavirus pandemic began, big single-family landlords have raised billions of dollars for home-buying sprees. Even if there isn’t a surge in repossessed homes to buy cheaply off the courthouse steps — which led to the emergence of Wall Street’s landlords during the foreclosure crisis a decade ago — there are likely to be a lot of forced sales and new renters. “A lot of people are house-rich but cash-poor,” said Ivy Zelman, chief executive of real-estate consultant Zelman & Associates. “If they bought in the last two or three years, even if they bought five months ago, they have equity.” Having plenty of home equity but reduced means to keep making payments could prompt many to sell while prices are high and exit homeownership with a cash cushion, Zelman said. People behind on their payments aren’t being kicked out of their houses yet because of federal and local restrictions on foreclosure enacted during the pandemic. Many with federally guaranteed mortgages have entered forbearance, which allows them to skip payments for up to a year without penalty and make them up later. Some 3.5 million home loans — a 7.01 percent share — were in forbearance as of Sept. 6, according to the Mortgage Bankers Association. Many more borrowers are behind on their payments but not in forbearance programs with their lenders.

About one million homeowners have fallen through the safety net Congress set up early in the coronavirus pandemic to protect borrowers from losing their homes, according to industry data, potentially leaving them vulnerable to foreclosure and eviction, the Wall Street Journal reported. Homeowners with federally guaranteed mortgages can skip monthly payments for up to a year without penalty and make them up later. They must call their mortgage company to ask for the relief, known as forbearance, though they aren’t required to prove hardship. Many people have instead fallen behind on their payments, digging themselves into a deepening financial hole through accumulated missed payments and late fees. They could be at risk of losing their homes once national and local restrictions on evictions and foreclosures expire as early as January. “Some borrowers are falling through the cracks that we’re not picking up,” said Lisa Rice, president and chief executive of the National Fair Housing Alliance. About 1.06 million borrowers are past due by at least 30 days on their mortgages and not in a forbearance program, according to mortgage-data firm Black Knight Inc. Of those, some 680,000 have federally guaranteed mortgages and thus qualify for a forbearance plan under a March law. The rest have loans that aren’t federally guaranteed, and their lenders aren’t required to offer forbearance, though many have chosen to do so. Lenders and consumer groups said the number of past-due mortgages that aren’t in forbearance could grow as several million people who are in forbearance reach the six-month point of their plans by the end of October. An extension of up to six months is possible, but homeowners must ask for it. Lenders said they are reaching out to these borrowers before their forbearance periods expire.

The California legislature passed S.B. 832 to update its homestead exemption for consumer debtors. The law's major provisions include:

1) Making the homestead exemption the greater of $300,000 or the countywide median sale price of a single-family home in the calendar year prior to the year in which the judgement debtor claims the exemption, not to exceed $600,000

2) Adjusting annually for inflation, beginning on January 1, 2022, based on the change in the annual California Consumer Price Index for All Urban Consumers for the prior fiscal year, published by the Department of Industrial Relations.

"This homestead exemption increase is long overdue," said bankruptcy attorney Jenny Doling of J. Doling Law PC (Palm Desert, Calif.). "It represents the median priced home in California, not a home of great value, just the average family home. Further, if a debtor’s home is sold and the debtor is paid the value of the homestead, the debtor only has 6 months to roll the funds into a new homestead or the debtor loses those funds.” The previous California law prescribed that the amount of the homestead exemption was either $75,000, $100,000, or $175,000, depending on certain characteristics of the homestead’s residents. Having passed both the California Senate and Assembly, S.B. 832 is expected to be signed by Gov. Newsom soon and will go into effect immediately. Click here to read the bill text.

As an eviction crisis has seemed increasingly likely this summer, everyone in the housing market has made the same plea to Congress: Send money — lots of it — that would keep renters in their homes and landlords afloat, according to a New York Times commentary. City officials have called for such rent relief. So have landlord associations, tenant advocates, legal aid lawyers, housing researchers, public health experts and economists. Now millions of renters have been covered by a national eviction moratorium, an unprecedented order by the Centers for Disease Control and Prevention to help control the coronavirus pandemic. But there is still no money, according to the commentary. Congress has yet to adopt a new aid package that includes broad rent relief. It hasn’t passed any other cash assistance lately either. Expanded unemployment benefits, worth $600 a week, expired at the end of July, along with a more limited eviction moratorium. There have been no new stimulus checks. And additional unemployment benefits created by executive action by President Trump have not yet reached many workers. That means that while the new order has halted most evictions through the end of the year, there remains no mechanism to cover what those tenants cannot pay — or to control the cascading consequences when rent dries up, according to the commentary. Tenants will still be on the hook for all this unpaid rent when the moratorium expires Dec. 31. And landlords in the meantime may find it increasingly hard to make repairs and cover the mortgage. For this reason, even advocates cheering the moratorium call it a half measure. And landlord groups warn it could destabilize the housing market even more.

While the overall amount of foreclosures continued its coronavirus-moratorium descent, Attom Data Solutions found that the share of zombie properties grew during the third quarter of 2020, National Mortgage News reported. In an analysis of data pulled the week of Aug. 17, Attom’s Vacant Property and Zombie Foreclosure Report showed 215,886 properties in the foreclosure process and approximately 7,960 — or 3.7 percent — sit vacant. The share rose from 2.97 percent in the second quarter and from 3.2 percent the year before. Meanwhile, zombie properties totaled 7,652 and 9,612 during those respective time periods. Overall, zombie foreclosures represent one in every 12,486 U.S. residential properties as of the week of Aug. 17. "Abandoned homes in foreclosure remain little more than a spot on the radar screen in most parts of the United States, posing few, if any, problems from neighborhood to neighborhood," Todd Teta, chief product officer with Attom Data Solutions, said in a press release. "But the latest numbers do throw a small potential red flag into the air, given the increase in the percentage of zombie foreclosures." New York again led the country in zombie properties at 2,136, though that total continues to tick down. Florida followed with 1,028, then 971 in Illinois and 887 in Ohio. By zombie share of total foreclosures, Indiana leads at 8.5 percent, followed by 6.8 percent in Kansas, 6.5 percent in Ohio and 6.3 percent in Rhode Island. About 1.6 percent of all 99.4 million homes sit vacant in the United States, totaling over 1.57 million single-family homes and condos.