Market Studies

Median home prices in January continued to stay above year ago levels while falling month-over-month, according to a recent report from RE/MAX. At the same time, inventory remained low, causing a shortage in supply while pushing up home prices, RE/MAX explained. At $155,000, the median sales price in January sat 6.6 percent below December’s sales price, but was still 8 percent higher compared to January 2012. Inventory trended downward month-over-month for 31 consecutive months in January after falling 5.1 percent from December.

Fixed mortgage rates continued to hold steady this week, according to data from Freddie Mac and Bankrate.com. Freddie Mac's Primary Mortgage Market Survey for the week ending February 14 showed no weekly changes in fixed rates: The 30-year fixed averaged 3.53 percent (0.8 point), while the 15-year average held at 2.77 percent (0.8 point). Meanwhile, Bankrate reported slight increases in fixed rates, though any movement was minor. According to Bankrate's survey, the average 30-year fixed-rate mortgage had a rate of 3.79 percent.

Housing may not be where it used to be, but on the upside, Freddie Mac suggested this indicates there's still plenty of room for the industry to grow. ""[T]he level of housing activity is still near historic lows. This means that there is still room for substantial growth in housing and housing-related industries before we return to a more normal environment,"" Freddie Mac stated in its latest economic and housing outlook. This optimistic viewpoint was reflected in the GSE's forecast for housing in 2013, especially for housing starts.

In a recent blog post from the Federal Reserve Bank of New York, three Fed researchers shared their findings on mortgages that would have been targeted by a controversial use of eminent domain proposed in San Bernardino County. Although the researchers found only 11 percent of the open loans in the county were not underwater, they also reported a dramatic decrease in payments and an increase in home values.

Foreclosure activity slowed in January with an especially notable drop in foreclosure starts, which hit a 79-month low, according to a recent foreclosure report from RealtyTrac. Foreclosure filings--default notices, scheduled auctions, and bank repossessions--were down monthly and yearly by 7 percent and 28 percent, respectively. Data from RealtyTrac also revealed a steep drop in foreclosure starts as starts fell 11 percent from the December and 28 percent from January 2012. Foreclosure starts are now at the lowest level since June 2006.

Bolstered by favorable seasonal adjustment factors, first-time claims for unemployment insurance dropped 27,000 to 341,000 for the week ending February 9, the Labor Department reported Thursday. Economists expected a much smaller decline to 360,000. Initial claims were under 350,000--a dividing line between a strong and weak labor market--for the third time in the last five weeks, hinting layoff activity has returned to normal.

For the first time since 2008, U.S. households stayed out of financial distress for three consecutive quarters, according to the Consumer Distress Index from CredAbility, a nonprofit counseling agency. In Q4 2012, households scored 71.8 out of 100, an increase from 70.48 in Q3 and 67.60 in Q4 2011. A score below 70 indicates a state of financial distress. Despite the recent improvements, Mark Cole, EVP for CredAbility, warned of threats that still remain.

California cities claimed seven spots on a top 10 list of cities experiencing the highest rental price increases for three-bedroom, single-family homes. RentRange observed changes in rent prices for three-bedroom, single-family homes located in cities with at least 25,000 residents. The data firm found the greatest growth in La Quinta, California, where rents increased 35.75 percent from December 2011 to December 2012.

About 60 percent of loans written today would not be acceptable under the finalized rules for a qualified mortgage (QM) and the anticipated rules for a qualified residential mortgage (QRM), according to new research from CoreLogic. CoreLogic analyzed 2.2 million loans written in 2010 to determine what percentage of them meets QM and QRM guidelines. But, CoreLogic still concluded that ""[w]hile QM and QRM remove 60 percent of loans, they remove 90 percent of the risk.""

At the end of 2012, the national mortgage delinquency rate fell nearly 14 percent over a one-year period, while more than 80 percent of metropolitan areas saw their rates decline, according to a TransUnion report. The rate of mortgages past due 60 or more days dropped to 5.19 percent in Q4 from 6.01 percent in the same quarter in 2011. ""The national mortgage delinquency rate experienced its largest yearly decline since the conclusion of the recession, though we still remain far above normal levels,"" said Tim Martin, group VP of U.S. housing at TransUnion.