Market Studies

In a blog post, a Freddie Mac executive revealed more than one-third of U.S. households are renters, the largest share since 1997, yet adequate, affordable rental housing is still out of reach for many. According to David Brickman, SVP of multifamily at Freddie Mac, the nation has seen 5.4 million new renter households between 2004 and 2011, and growth is expected to continue. At the same time, Brickman noted more than half of all renters in the country exhaust more than 30 percent of their income on housing.

Inclusionary housing policies--those which either require or encourage developers to provide low-priced housing within market-rate developments--have largely survived the recent housing downturn. However, several obstacles now stand in their way, preventing them from reaching their full effectiveness, according to a recent report from the Center for Housing Policy. Major hindrances to these policies include shifts in development pattern, new restrictions regarding rental housing, and rising homeowner association fees, among others.

With the ongoing housing recovery, the foreclosure market is also stabilizing and foreclosure prices are bottoming out, according to a report from, according to a report from FNC. Foreclosure price discounts are now at pre-housing crisis levels, averaging 12.2 percent in Q4 2012. In 2004, foreclosure discounts hovered near the same levels, averaging around 12 percent. At the peak of the crisis, discounts for foreclosed homes averaged 25 percent, data from FNC revealed.

Led by a sharp drop in the South, builder confidence slipped in February to 46, the lowest level since November, the National Association of Home Builders reported Tuesday. Economists had expected the Housing Market Index (HMI), a measure of confidence, would improve to 48 from January's reading of 47. The national index has stalled since reaching an 80-month high of 47 in December.

Foreclosure activity was somewhat mixed in the five Western states--Arizona, California, Nevada, Oregon, and Washington--observed by ForeclosureRadar over the month of January. Notably, California foreclosure sales were down in January, despite a past trend of an uptick in the month following a decline in December. However, this January, both notices of default and notices of foreclosure sale declined in January--down 60.5 percent and 34.83 percent, respectively, over the month. Adequate inventory is necessary for a recovery to take place, but is lacking in much of the state, according to the analytics firm.

In a blog post Friday, Redfin revealed new conventional listings have actually gone up 2 percent compared to last year, while listings for distressed properties have been reduced in half. Redfin conducted an analysis of new property listings in the first five weeks of 2013 (January 1 to February 11) compared to the same period in 2012. The Seattle-based brokerage found short sale listings decreased 54 percent from 2012, while REO listings are down by 46 percent. Overall, new listings declined 18 percent from 2012.

The pace of modifications is slowing compared to the 2010 peak, but repeat modifications are on the rise, according to a recent research report from Barclays. Not only are mods returning for seconds, but researchers from Barclays also found remodifications perform more poorly than first-time mods. Barclays gave three reasons for the rise in repeat mods: first-time mods did not reduce payments enough, leading to higher re-defaults; servicers are taking advantage of HAMP principal reduction alternatives; and servicing transfers are leading to an increase in remodifications.

President Obama faces a budget obstacle in his plans to rebuild crumbling bridges and address other pressing infrastructure needs. Unlike many governments, the United States does not have a separate budget for capital spending, which means each tax dollar is as likely to go to the construction of, say, a courthouse, as it is to paying the salary of a judge or court clerk who works there. What would having a separate capital budget do for the country? For starters, it would rationalize our spending and make it more difficult for lawmakers to lard up spending bills with long-term projects.

The market is now poised for many banks to begin unloading nonperforming assets--particularly commercial real estate--in the form of bulk sales, according to Fitch Ratings. Tightening yield spreads in the commercial market, pressure from regulators regarding loss reserve positions, and limited financing will prompt banks to unload nonperforming commercial assets over the next 12 to 18 months, according to the ratings agency.

Certain states are seeing above average gains in home prices, but concerns have been raised that some states are seeing ""unsustainable, investor-fueled"" increases, Capital Economics pointed out in a recent report. In response to those uncertainties, the research firm conducted an analysis of seven states plus the District of Columbia to see if price gains are merely investor led or truly sustainable. Out of the 8 places covered, the firm concluded five states appear to be sustainable based on factors such as income and employment growth.