Market Studies

As the rental market continues to grow stronger, the quality of rental applicants also showed improvement from last year, according to report from CoreLogic. The data provider's multifamily applicant risk (MAR) index report stood at 106 in Q3 2012, an improvement of two points from last year, but a decrease of 3 points from Q2 2012. A score above 100 indicates an applicant pool with reduced average risk of default.

Housing starts rose 3.6 percent in October to a seasonally adjusted annual rate of 894,000, the highest level since July 2008, but permits for new residential construction fell the Census Bureau and HUD reported jointly Tuesday. Housing completions soared in October, up 14.5 percent during the month to 772,000, the highest level since June 2010. The increase in completions was led by a 5.3 percent jump in multifamily completions. Single-family completions in October reached their highest level since June 2010, increasing to 542,000.

Five mortgage servicers--Bank of America, Chase, Citi, Wells Fargo, and Ally--have provided over 300,000 borrowers with some form of mortgage relief as part of a settlement agreement, according to a report from settlement monitor Joseph A. Smith, Jr. As of September 30, 2012, the banks reported they have provided $26.1 billion in actual consumer relief. Short sales accounted for $13.13 billion of that amount. Part of the settlement agreement requires the banks to provide $20 billion in relief, but the servicers are not always credited on a dollar-for-dollar basis.

Builder confidence continued its march to break-even with the Housing Market Index (HMI) climbing five points in November to 46, its highest level since May 2006, the National Association of Home Builders (NAHB) reported Monday. The HMI survey was conducted in the two weeks immediately following Hurricane Sandy and therefore reflects builder sentiment during that period. The November boost was due primarily to a surge in current sale activity.

Weathering Hurricane Sandy, sales of existing-homes increased in October, the National Association of Realtors (NAR) reported Monday. Total existing-home sales rose 2.1 percent to a seasonally adjusted annual rate of 4.79 million in October from a downwardly revised 4.69 million in September. September sales were originally reported at 4.75 million. October home sale are up 10.9 percent over October 2011. The median price of an existing single family home was $178,600 in October, up from a downwardly revised $178,300 in September (originally $183,900) and 11.1 percent ahead of the median price in October 2011, $160,300.

While the housing market has seen some recent positive signs, many still wonder when a true recovery will occur. Distressed real estate continues to hold a market-wide recovery at bay, and predicting a timeline for bringing distressed real estate to manageable levels is difficult at best. After tracking 5,021 properties that became distressed between April 2005 and July 2012, ProTek released a report detailing its observations. ProTek found more than 20 percent of properties remained distressed for more than five years, and LTV was found to be ""a key driver"" in the transition into foreclosure.

The National Association of Home Builders' (NAHB) Home Opportunity Index (HOI) revealed 74.1 percent of all homes sold in Q3 were affordable to families earning the U.S. median income of $65,000. That percentage was up slightly from 73.8 percent in the second quarter.

In October, home prices and sales increased compared to 2011 levels, while inventory remained a concern, RE/MAX revealed in a recent report. The median sales price in October 2012 stood at $158,900, a 3.7 percent decrease from September but a 2.1 percent increase from October 2011. Home sales managed to post increases both yearly and monthly in October, which RE/MAX says is ""an impressive performance since seasonal patterns typically see a slight drop from September to October.""

Despite the recent declines in homeownership, the cost burden of owning a home decreased in 2011 and has ""fallen substantially for young owners during the last four years,"" Fannie Mae stated in a recent report. When measuring housing cost burden, analysts often look for households paying more than 30 percent of their gross income in housing costs, which analysts define as rental or mortgage payments combined with utility spending. In 2011, the percentage of homeowners who fell into this category decreased by about one percentage point. In contrast, the number of renters in this category grew.

Based on the stronger performance of the consumer distress index, CredAbility said the ""stage of strong holiday spending"" may be set. With a score below 70 indicating a state of financial distress, the distress index sat higher at 70.5 out of 100 in the third quarter. In the second quarter, the index was also above 70 at 71.3. For the first time since early 2008, the credit counseling agency says consumers have managed to stay out of financial distress for two consecutive quarters.