Market Studies

The aggregate value of Commercial Real Estate (CRE) loans as priced by DebtX continued to show a gain value. DebtX reported the value of CRE loans increased to 88.4 percent as of June 30 from 88.2 percent as of the end of May. A year ago in June, loan values stood higher at 84.9 percent.

Freddie Mac announced Thursday that after more than three months of record-low drops, mortgage rates slid up this week. The GSE's Primary Mortgage Market Survey showed that the 30-year fixed-rate mortgage (FRM) averaged 3.55 percent (0.7 point) for the week ending August 2, up from 3.49 percent the previous week. The 15-year FRM also slid up, averaging 2.83 percent (0.6 point) from 2.80 percent last week.

First-time claims for unemployment insurance rose 8,000 for the week ended July 28 to 365,000, the Labor Department reported Thursday. Economists surveyed by Bloomberg had expected 370,000 initial claims. The prior week's total was revised up to 357,000 from the originally reported 353,000.

Acknowledging economic activity decelerated somewhat over the first half of this year and growth in employment has been slow in recent months, the Federal Open Market Committee nonetheless decided Wednesday to take no new actions to stimulate growth. Concluding a two day meeting the FOMC instead said it would maintain its low interest rate policy and continue previously announced programs to reinvest proceeds of maturing Treasury securities it already holds and extend the average maturity of its portfolio.

Freddie Mac released the results of its second quarter refinance analysis Wednesday, revealing that homeowners who refinance continue to strengthen their housing situations. Freddie Mac's report showed that 81 percent of homeowners who refinanced their first-lien home mortgage either maintained the same loan amount or lowered their principal balance in the year's second quarter.

While the month-month Case Shiller Home Price Index shot up in May a record high increase (2.2 percent) in the 20-city index and a near-record (2.2 percent increase) in the narrower 10-city index it also suggested employment has less to do with the change in home prices than might otherwise have been thought.

FHFA Acting Director Edward DeMarco released a statement Tuesday reiterating his stance that offering principal reduction for Fannie Mae and Freddie Mac loans is not in the best interest of the GSEs and taxpayers. DeMarco has faced a barrage of criticism for not allowing the GSEs to apply the Home Affordable Modification Program Principal Reduction Alternative (HAMP PRA) program to underwater loans and has been urged by lawmakers to reconsider his position. After what DeMarco said was extensive analysis, he stated, ""FHFA has concluded that the anticipated benefits do not outweigh the costs and risks.""

In June, 60,000 homes turned into completed foreclosures compared to 80,000 foreclosures a year ago, CoreLogic reported Tuesday. The analytics company stated the yearly drop puts completed foreclosures at 2007 levels. Month-over-month, there was no reported change in completed foreclosures for June. The number of homes in national foreclosure inventory in June stood at 1.4 million, or 3.4 percent of all homes with a mortgage.

Personal income rose $61.8 billion in June but consumers held on to it as personal spending fell 1.3 billion in the month, the Bureau of Economic Analysis reported Tuesday. The increase in income - 0.5 percent - topped expectations of a 0.4 percent boost, but the 0.01 percent decline in spending fell short of the 0.1 percent increase economists had expected.

Home prices rose sharply in May cutting the year-year drop in prices to 0.7 percent from 1.8 percent in April, Standard & Poor's reported Tuesday in its Case-Shiller Home Price Index. Prices in the 20 cities surveyed rose 2.2 percent month-month. The 10-city index also improved 2.2 percent in May, shaving the year-year decline in prices to 1.0 percent in May from 2.2 percent in April. The month-month increase fell short of the 2.3 percent gain registered in June 2004. Economists had expected the 20-city index to grow 1.2 percent in May.