Market Studies

Default rates are on the rise month-over-month for both first and second mortgages nationwide, according to the S&P Dow Jones Indices and S&P/Experian Consumer Credit Default Indices for December 2014 released Wednesday. According to the data, the first mortgage default rate experienced its biggest monthly increase since September 2013, rising by five basis points from 0.97 percent in November up to 1.02 percent for December.

A nationwide survey of real estate investors bidding on properties offered for auction during the fourth quarter of 2014 revealed that flipping was the preferred investing strategy over renting, according to Auction.com's Q4 2014 Real Estate Investor Activity Report. Though various reports have suggested in the last year that flipping opportunities are dwindling, Auction.com's latest survey affirms that flipping is still going strong: 50 percent of investors said they intended to flip the homes they purchased, compared to 47.3 percent who said they intend to rent them out (2.7 percent were undecided).

Freddie Mac cited a number of positive opportunities for housing to start 2015, but households and businesses should take advantage of them because those opportunities may be limited, according to the GSE's January 2015 U.S. Economic and Housing Market Outlook released on Tuesday.

New York-based credit rater Kroll Bond Rating Agency (KBRA) has updated its residential mortgage default and loss model, incorporating a new methodology that projects loan-by-loan default, loss, and prepayment on residential loans in order to track non-agency residential mortgage-backed securities (RMBS), KBRA announced. The new methodology uses revisions that reflect additional data analysis and evolving origination trends, and is an update to KBRA's RMBS model methodology originally released three years ago in January 2012.

New York-based investment bank Goldman Sachs reported a slight year-over-year decline in Q4 2014 net earnings, but for the whole year of 2014 the firm reported a slight uptick from 2013, according to the firm's Q4 and year-end earnings statement released on Friday.

According to the group conducting the confidence survey, January's increase—which lifted the index to its highest level since 2004—was driven by an improvement in personal finances, with more consumers reporting increases in household income than any time in the past decade. They're also more optimistic about the labor outlook as job growth continues on a steady track.

The share of all-cash home sales continued its streak of annual declines in October but remained elevated compared to pre-crisis levels, according to data released Wednesday. In a post on the company's blog site, CoreLogic estimated that cash transactions accounted for 35.5 percent of total home sales in October 2014, down from 38.7 percent the year prior.

While housing recovery has generally been uneven for the last few years, the housing market experienced substantial growth in the fourth quarter of 2014 for all five indicators of Trulia's Q4 2014 Housing Barometer, which was released on Thursday. Three of the five indicators – existing home sales, excluding distressed sales; home price level; and delinquency plus foreclosure rate – are all more than three-quarters of the way "back to normal" as of the end of 2014, according to the barometer.

Two of the nation's largest mortgage lenders, JPMorgan Chase and Wells Fargo, reported year-over-year increases in their net incomes for 2014, according to the banks' respective earnings statements released on Wednesday. JPMorgan Chase reported a record net income of $21.8 billion for the full year of 2014, up from 2013's net income of $17.9 billion. The firm's earnings per share for 2014 was $5.29, which was also a record (for 2013, earnings per share was $4.35). Revenue experienced s slight decline, however, from $99.8 billion in 2013 down to $97.9 billion in 2014.

Consumers' median earnings growth expectations were 2.5 percent for the year ahead in December, the New York Fed revealed. While that marks a step back from November's reading of 2.7 percent, it's still the second-highest reading since the start of that measure in July 2013.