Market Studies

As new construction in the apartment sector takes form, occupancy remains high but rent growth is beginning to slow, according to the latest research from Carrolton, Texas-based RealPage, a software provider for apartment communities. However, RealPage does not see new construction as a threat to the strong rental market nationwide. Apartment occupancy currently stands at 94.8 percent in the core 100 metro areas measured by RealPage MPF, while rent growth slowed from 4.8 percent at the end of 2011 to 2.6 percent at the start of this year. California markets topped the list of markets with the highest annual rent growth for the first quarter of this year, according to RealPage.

The March employment situation report was another in a series of labor reports that had analysts scratching their heads--on the left or right side--depending on their politics. Just as there is no Democratic or Republican way to collect garbage (okay, there might be depending on how much government you want), there should be no Democratic or Republican economic data. The numbers are what they are, not what your political lens tells you they are. That said, when data such as the March report are released--weak job growth, yet a drop in the unemployment rate--conspiracy theorists emerge from the woodwork.

The housing industry is making ""important progress across many key indicators,"" according to the Obama Administration's latest housing scorecard, but as usual, the administration continued to warn the ""overall recovery remains fragile."" In the March report, the administration highlighted data showing improvements in home prices. In conjunction with the scorecard, the administration also released its progress report on the Making Home Affordable Program.

With the spring house hunting season upon us, Trulia reported a 7.2 percent year-over-year increase in asking prices on the national level. On a seasonally adjusted basis, prices rose 1.1 percent month-over-month. On the other hand, rent price growth--for single-family homes, at least--showed signs of stagnancy in March. Nationally, rent for single-family homes increased 0.1 percent year-over-year. ""Why have rents stopped rising on single-family homes? More supply,"" explained Jed Kolko, chief economist at Trulia.

The economy added 88,000 jobs in March--the weakest showing since last June--but the unemployment rate dropped to 7.6.percent, its lowest level since December 2008, the Bureau of Labor Statistics (BLS) reported Friday. Economists had forecast payrolls would grow by 200,000, and that the unemployment rate would remain at 7.7 percent.

Markets around the country suffered from inventory shortage in February, and Connecticut was no exception, according to data from the Warren Group. The real estate data provider's February report shows single-family home sales dropped 7.7 percent year-over-year in the Constitution State, decreasing to 1,149. The decline puts an end to a 13-month streak of year-over-year sales improvements.

Freddie Mac's Primary Mortgage Market Survey shows the average 30-year fixed mortgage rate was 3.54 percent (0.8 point) for the week ending April 4, down from 3.57 percent last week. Last year at this time, the 30-year fixed-rate mortgage (FRM) averaged 3.98 percent. Bankrate.com also observed declines in its weekly national survey. The 30-year FRM averaged 3.73 percent (down from 3.75 percent), while the 15-year fixed averaged 2.95 percent (from 2.97 percent before).

Servicers continue to make strides in home retention efforts, completing more than 360,000 retention actions in the fourth quarter of 2012. However, Fitch Ratings detects continued weak asset quality trends, especially among loans modified from 2008 through 2010. In fact, Fitch's findings lead the agency to fortify its belief that troubled debt restructurings should be counted as nonperforming assets. ""[W]e regard the high delinquency and foreclosure rates for recently modified mortgages as reflective of still elevated residential mortgage asset quality problems,"" Fitch said.

After climbing for seven straight months, the improving markets index (IMI) from the National Association of Home Builders (NAHB) and First American fell by one market from the prior month. The index identified 273 markets as improving this month, down from 274 in March. Although the index welcomed five new markets in April, six dropped off the list. ""In some markets, the main thing that's holding back a recovery is a relatively thin inventory of homes for sale, which could be resolved if builders had easier access to credit for building homes and putting people back to work,"" said Rick Judson, NAHB chairman.

With institutional investors playing a major role in the home-buying market as they snagged tens of thousands of homes in 2012, RealtyTrac set to work to determine which markets still offer the best opportunities for investors intending to purchase single-family homes to rent. Topping the list of top 20 markets were Memphis, Tennessee; Saginaw, Michigan; Toledo, Ohio; Ocala, Florida; and Las Vegas, Nevada. In Memphis, Tennessee, the median sales price for a three-bedroom home is $72,605, and investors can expect a cash purchase capitalization rate of 10.38 percent.