Market Studies

The majority of metros covered in Zillow's Real Estate Market Reports saw home values inch up from March to April, the company reported Tuesday. Zillow's Home Value Index increased 0.5 percent month-over-month and 5.2 percent year-over-year. April marked the sixth consecutive month in which home values appreciated more than 5 percent on a yearly basis. According to Zillow, the last time national home values were at this level was in June 2004.

As Congress moves to consider immigration reform, the housing industry is also weighing in on how certain provisions will impact the market. According to the NAHREP, allowing a path for the legalization of undocumented immigrants could mean $500 billion in new real estate transactions. The NAHB also provided input on immigration reform and asked lawmakers to establish a ""fair and workable"" E-Verify system during a congressional round table discussion last week.

The Center for Responsible Lending (CRL) expressed opposition toward bill H.R. 1077, known as the Consumer Mortgage Choice Act, which would exclude loan originator salaries, insurance and taxes held in escrow, and loan level pricing adjustments by government agencies or GSEs when computing points and fees. In a letter to Congress, CRL argues that H.R. 1077 ""promotes steering borrowers into more expensive loans"" and ""creates new loopholes that would allow loans with higher costs and fees to improperly meet"" QM standards.

The Mortgage Bankers Association (MBA) shared a proposal to bring private capital back into the mortgage market while decreasing costs for taxpayers and borrowers. In a recent paper, the MBA explained the up-front risking sharing concept, which calls for the GSEs to offer risk-sharing at the front end of transactions. The proposal also suggested Fannie Mae and Freddie Mac should accept loans with ""deeper levels of credit enhancement"" in exchange for reduced guarantee fees and other loan level charges.

Fiscal drags such as the sequester may have weakened economic momentum, but the economy should ""reaccelerate"" in the second half of this year as financial and housing conditions improve, according to Fannie Mae's Economic and Strategic Research Group. ""Employment numbers are getting better, albeit it at a relatively slow pace, and the April employment picture should help boost consumer sentiment toward the economy overall,"" said Doug Duncan, chief economist for Fannie Mae.

Economists usually do it with models, so it's rare in economics to be able to conduct a laboratory experiment. Currently, though, we're watching two experiments in different corners of the world that support the idea that stimulus works to repair a troubled economy and austerity doesn't. Japan and the eurozone are, through their actions, demonstrating how economies can move in opposite directions with Japan's stimulus plan succeeding and the eurozone's austerity program failing.

The housing market came out of April in a particularly strong position, according to Redfin's latest Real-Time Price Tracker, with prices, sales, and inventory posting gains across the country. Redfin's monthly report--based on home prices, sales, and inventory across 19 U.S. markets--shows prices rose 4.9 percent in April on a monthly basis and 16.1 percent on a yearly basis. Meanwhile, the number of homes for sale increased 6.4 percent from March to April.

At the Realtors Midyear Legislative Meetings & Trade Expo, NAR's chief economist Lawrence Yun projected further increases in existing-home sales. According to a release, Yun expects existing-home sales to increase to nearly 5 million this year, then grow to an annual rate of 5.3 million sales in 2014, and rise up to 5.7 million in 2015. NAR projects the median existing-home price will increase to about 8 percent this year from 6.4 percent in 2012, and then slow to 5 percent in 2014.

While the worst of the foreclosure crisis appears to be over, foreclosures led to the loss of $192.6 billion in wealth for Americans in 2012, according a report from the Alliance for a Just Society, national coalition of eight state-based grassroots community organizations. On average, the estimated loss in wealth last year comes out to about $1,700 per household for 114.7 million households in the nation, according to the coalition. The report also suggested the crisis is not yet over.

The ""juice"" that will fuel the economic recovery is housing, or more specifically, new home sales, according to Freddie Mac's economic and housing market outlook report for May. As the building of new homes adds to the availability of jobs, the unemployment rate should inch down. ""Based on historical correlations, every additional 100 thousand housing units started brings down the unemployment rate for construction workers by about three-fourths of a percentage point,"" the report stated. For 2013, Freddie Mac forecasts housing starts will increase by 200,000 units.