Market Studies

The U.S. economy added 175,000 jobs in February, beating expectations after two weak months but still failing to impress, according to a report from the Labor Department. Economists surveyed by Bloomberg anticipated a consensus forecast of 150,000 new jobs. The unemployment rate edged up to 6.7 percent from January’s five-year low of 6.6 percent.

“Mortgage rates were down this week as real GDP was revised downwards to 2.4 percent growth in the fourth quarter of 2013,” said Frank Nothaft, VP and chief economist at Freddie Mac. “Fixed residential investment negatively contributed to GDP decreasing 8.7 percent in the fourth quarter.”

While many price indicators have pointed to slowdowns over the last few months, the latest trend could be the start of something worse, says Dr. Alex Villacorta, VP of research and analytics at Clear Capital. The company’s Home Data Index (HDI) Market Report, recorded only a 1 percent gain in home prices over the quarter ending last month.

The Wells Fargo Economics Group released its California Economic Outlook for February, 2014. The report noted that while recovery has been slow in the past, "[T]he state has methodically made progress working through a number of major impediments, most notably the overhang of foreclosures and distressed homes left over from the housing bust."

TransUnion released its Credit Risk Index, which measures aggregate credit risk in the nation. The report released Wednesday concluded that credit risk dropped at the end of 2013 to the lowest level since 2005. The index dropped to 110.10 in the fourth quarter of 2013, down nearly 9 percent from the 120.64 reading from Q4 2012.

DataQuick revealed its monthly Property Intelligence Report (PIR), showing that foreclosures have decreased in 31 of the 42 reporting markets over the last month, quarter, and year. Along with a general decrease in foreclosures across the measured markets, DataQuick reports that January home price growth has leveled off in nearly all markets, even turning negative in others.

The Data and Analytics Division of Black Knight Financial Services released its Mortgage Monitor Report, which looked at data as of the end of January, 2014. The report found that Home Affordable Refinance Program (HARP) eligible loans have shrunk throughout the year, noting "a general decline in the overall 'refinancible' population of both traditional and HARP-eligible borrowers with associated loan origination volumes dropping in both categories as well."

A new report by the Census Bureau shows that construction spending for the month of January has increased. The government’s latest report shows spending on all construction projects was up 0.1 percent from December, an estimated seasonally adjusted annual rate of $943.1 billion.

Strong fourth-quarter 2013 earnings by Freddie Mac capped a year of unprecedented financial earnings for the government-sponsored enterprises (GSEs), but reflect several one-time items, according to a release issued by Fitch Ratings. Fitch comments, "While results of the type posted in 2013 will not be repeated, Fitch Ratings expects increased guarantee fees (g-fees) and improving mortgage credit quality to support continued profitability for the GSEs this year."

Three special servicers released their fourth quarter and year-end numbers, noting increases in revenue and increasingly active originations sectors. However, analysts remain concerned that the increased revenue, largely derived from government programs such as HARP, will stall as refinances slow down.