Market Studies

Demand for distressed properties from investors is contributing to the recovery, not creating an artificial one, according to Pro Teck's Home Value Forecast for April. One of the catalysts driving the housing market rebound has been large investment funds, which are buying distressed single-family homes to be used as rentals. ""These funds have also been renovating homes, which has helped to improve the overall conditions of the surrounding neighborhoods and provided a positive injection of capital,"" said Tom O'Grady, CEO of Pro Teck.

First-time claims for unemployment insurance increased for the fourth time in the last five weeks, edging up 4,000 for the week ending April 13 to 352,000, the Labor Department reported Thursday. Economists expected 347,000 initial claims. Initial jobless claims for the week ending April 6 were revised up to 348,000 from the originally reported 346,000.

Despite threats from the federal budget sequester, the nation's economy expanded ""at a moderate pace"" from late February to early April, the Federal Reserve reported Wednesday in its periodic ""Beige Book. Activity in five Federal Reserve Districts--Cleveland, Richmond, St. Louis, Minneapolis, and Kansas City--was described as growing at a moderate pace, while in five other districts-- Boston, Philadelphia, Atlanta, Chicago, and San Francisco--growth was notched slightly slower as ""modest.""

BofA reported Wednesday net income of $2.6 billion for the first quarter of 2013, up from $653 million the same quarter last year. On the residential lending front, the company reported lower mortgage banking income, largely as a result of lower servicing income. However, first-lien mortgage production rose 57 percent to $24 billion, approximately 91 percent of which was for refinances. In addition, the number of 60-plus day delinquent first mortgage loans dropped by more than 100,000 from Q4, falling to 667,000.

Housing continues to be a bright spot in the economy, contributing positively to GDP. In fact, Fannie Mae cited the sector as the most likely source of upside to our forecast in its April 2013 Economic Outlook. According to the GSE, residential investment--once a drag on the economy--has contributed positively or neutrally to the nation's economic growth for the past seven quarters. The GSE expects this trend to continue this year.

Home finance balances written off in the first quarter fell to a five-year low, according to Equifax's National Consumer Credit Trends report for March. The balance for home finance write-offs, which includes loans that completed the foreclosure process, transitioned into REO status, entered bankruptcy, or were charged off by the lender, decreased to $43.1 billion in the first quarter of this year. The balance represents a 22 percent decline from $55.4 billion in Q1 2012.

Mortgage default rates moved lower along with the overall national default rate in March, according to the Consumer Credit Default Indices released by S&P Dow Jones Indices and Experian. The first mortgage default rate fell to 1.41 percent last month from 1.48 percent in February and 1.88 percent from March 2012. The second mortgage default rate was down to 0.69 percent, a monthly and yearly decrease from 0.71 percent and 1.03 percent, respectively.

Led by a surge in multifamily building, housing starts jumped 7.0 percent in March to a seasonally adjusted annual rate of 1,036,000, the highest level since June 2008 while housing starts dropped 3.9 percent to 902,000, the lowest level since November, the Census Bureau and HUD reported jointly Tuesday. In February, multifamily activity represented 60 percent of the increase in permits, while in March, all of the multifamily units accounted for all of the increase in starts as single-family starts fell.

Home sales rose 25 percent month-over-month in March, reflecting the normal spring spike that occurs every year, according to Redfin. On a year-over-year basis, however, sales were up just 0.9 percent--the smallest gain in 14 months. Ten of the 19 markets tracked by Redfin saw sales increase year-over-year, one fewer than February. All 19 markets posted month-over-month improvements. Home prices also saw a nice boost, growing 6.2 percent from February and 15 percent from March 2012. However, the number of homes for sale fell 31 percent from March 2012 to March 2013.

According to data from Moody's Analytics and RCA, Commercial real estate (CRE) prices ticked up slightly in February. The Commercial Property Price Indices (CPPI) national all-property composite index increased 0.5 percent in February from the January price level, Moody&'s revealed in a release. The index's two components--apartment and core commercial--increased by 1.3 percent and 0.2 percent, respectively, for the month.