Here is what was at the top of the headlines for the mortgage industry this past week:

1. Are We There Yet? Freddie Mac Says Recovery Has Ways to Go

The housing market turned the corner in 2012 Freddie Mac’s economists said today, and the recovery was fully underway in 2013.  But despite the positive trends in home price indexes, housing starts, and home sales, when can we say that housing has fully recovered? Chief Economist Frank E. Nothaft and Deputy Chief Economist Leonard Kiefer attempt to answer that question in the January edition of Freddie Mac’s U.S. Economic and Housing Outlook.

The two say that for the economy and housing market to be functioning normally we need to see four positive indicators; a healthy jobs market with low and stable unemployment, mortgage delinquencies back near historical averages, home prices that are consistent with an affordable mortgage payment-to-income ratio, and home sales in line with historical norms.

Since the recession the labor market recovery has been modest with a December unemployment rate of 6.7 percent, high by historical standards but moving down.  Most economists agree that the rate should be between 5 and 6 percent for an economy at its long-run potential.  Nothaft and Kiefer say it may be another two years before that is achieved.


2. Foreclosures Fall to Lowest Since ’07 as Housing Rebounds

Foreclosure filings fell last month, capping a year in which the number of homes in the repossession process dropped to the lowest level since 2007 amid rebounding U.S. property prices.

Default, auction and repossession notices in December fell 1 percent from the previous month and 28 percent from a year earlier, RealtyTrac said in a report today. About 1.36 million U.S. properties received foreclosure notices last year, a 26 percent decrease from 2012 and 53 percent plunge from the peak in 2010 when 2.9 million properties got filings. One in 96 households received at least one notice during the year, according to the Irvine, California-based data seller.

Strengthening buyer demand and tight inventories of available properties are helping troubled homeowners avoid foreclosure by selling and allowing banks to dispose of seized houses. U.S. home prices in November gained almost 12 percent from a year earlier, data from Irvine-based CoreLogic showed last week.

3. Half of U.S. Counties Haven’t Recovered From Recession

About half of the nation’s 3,069 county economies are still short of their prerecession economic output, reflecting the uneven economic recovery, according to a new report from the National Association of Counties.

The overall U.S. economy had reached its prerecession level of gross domestic product three years ago, Commerce Department figures show.

Almost 400 counties saw no decline in GDP from their prerecession levels. Large counties were hit hard by the recession, but have recovered relatively strongly.

The roughly 800 counties boasting prerecession employment levels by 2013 are mostly in the Midwest and South. And just 54 had achieved their prerecession level of unemployment last year, the report said.

“This shows us that although the U.S. economy as a whole is on the right track, we have a fragile recovery, and at the same time it’s an uneven recovery,” Ms. Istrate said.