Market Studies

The home improvement sector is seeing a lot more activity thanks to investors who are demanding homes in need of repair and homeowners who are tackling renovations they once avoided. According to a Bank of America Merrill Lynch Global Research report, renovation spending now accounts for about half of the construction expenditures market; historically, renovation spending has made up about a quarter of the market.

Credit quality of large loan commitments owned by domestic and foreign banks and nonbanks is on the rise for the third consecutive year, according to this year's Shared National Credits (SNC) Review. The review revealed that the volume of criticized loans (rated special mention, substandard, doubtful, or loss), while still historically high, fell to $295 billion, an 8.1 percent drop from 2011.

Just how important is disclosure to American borrowers? Very important, if the figures from a recent Harris Interactive survey mean anything. MortgageMarvel.com commissioned a survey of 2,214 American adults 18 years or older to learn that one full-quarter of Americans take disclosure into account when considering their next home loan. After disclosure, 20 percent of survey respondents ranked anonymity as their second most-valued quality in the lending process.

The percentage of first-mortgages 30 days or more past due saw a double digit year-over-year decline, according to a report from Equifax. First-mortgage delinquency rates dropped 15 percent in July 2012 from July 2011. In addition, first mortgage severe derogatory rates, which are mainly loans transitioning to REO status, declined 17 percent year-over-year.

A surplus of REO inventory from financial institutions, demand for single-family rentals, tight lending standards - these are just a few reasons interest has developed for securities backed by cash flows from single-family rental properties. While interest has formed for good reasons, there are still risks involved. In a recent report, Moody's Investors Service highlighted two key factors that can be used to determine credit risk for such transactions: Performance of an operator or manager and the variability of the cash flow from rentals and property dispositions.

After seeing some of the worst of the housing crash, Florida is continuing its steady bounce back, Florida Realtors reported Wednesday. According to the group, the Sunshine State saw increases in pending sales, closed sales, and median prices in July, while inventory of homes and condos for sale dropped.

Lack of inventory continues to stunt pending home sales in California, according to the California Assocation of Realtors' (C.A.R.) most recent home sales report. The shortage has specifically impacted REO sales, which dropped both yearly and monthly.

The share of homeowners with underwater mortgages continued its decline in the second quarter, according to the Zillow Negative Equity Report. About 15.3 million homeowners with a mortgage were underwater, or 30.9 percent, a drop from 15.7 million or 31.4 percent. The report also revealed that negative equity more often affects younger age groups, with nearly half (48 percent) of borrowers under age 40 with an underwater mortgage.

This year's second quarter saw the largest quarterly growth in home prices in nearly seven years, according to FHFA's purchase-only home price index (HPI). The agency reported house prices rose 1.8 percent from the year's first quarter to the second quarter-the largest growth since the fourth quarter of 2005. In addition, distressed sales in the market fell to 29.1 percent, a sharp drop from the first quarter's 38.3 percent share.

According to Freddie Mac's weekly Primary Mortgage Market Survey (PMMS), the 30-year fixed rate mortgage (FRM) averaged 3.66 percent (0.7 point) for the week ending August 23, up from 3.62 percent the previous week. The 15-year FRM also slid up, averaging 2.89 percent (0.6 point). A week ago, the 15-year fixed averaged 2.88 percent.