Market Studies

Builder confidence jumped six points in July its highest level since March 2007, the National Association of Home Builders (NAHB) reported Tuesday. Economists had expected a modest one point increase in July. The six point gain to 35 was the largest month-month gain since September 2002 when the confidence gauge rose eight points.

Citigroup reported a net income of $2.9 billion, $0.95 per share, during the second quarter of this year, down 12 percent from the second quarter of last year, according to its earnings report released Monday. The bank's revenues totaled $18.6 billion in the second quarter, a 10 percent decline from last year. According to Citigroup, the decline in earnings is largely the result of the ongoing process of winding down Citi Holdings, a division opened in 2009 to house assets and businesses the bank hopes to unload.

The company's recent HPI is an update from an earlier release to reflect residential sales concluded during April 2012. The index showed that home price values fell 0.1 percent from April 2011 to April 2012 ($201,000 to $200,000). However, price index values rose from January's low ($195,000) at a pace not seen in more than half a decade. The accelerated rate of the HPI's increase represents an annualized rate of 13.1 percent per year (compared to negative 6.1 percent/year from May 2007 to January 2012).

Home prices are increasing, but one of the main drivers behind the boost in home values is also weighing on supply and demand. According to a report from CoreLogic, negative equity is helping to drive up home prices because it also keeps homeowners from listing their property, which keeps inventory low. Of the largest 100 markets, the five markets where prices are accelerating the fastest also have the highest share of negative equity and high demand for distressed properties.

With the help of record-low mortgage rates, HARP refinances surged in May, accounting for 20 percent of all loans refinanced by the GSEs, FHFA announced Monday. The one in five ratio of loans refinanced through HARP is the largest increase since the program's 2009 inception. The number of underwater borrowers who found relief through HARP also saw a significant increase. Year-to-date through May, 78,273 refinances were completed for underwater borrowers compared to 59,991 refinances for the entire year of 2011.

Real estate broker Redfin released the June results of its Real-Time Home Price Tracker showing home price increases in nearly all 19 major U.S. markets. The tracker showed an average year-over-year price gain of 3 percent across all major markets and a monthly gain of 2.6 percent. Sales volumes also rose year-over-year (a 7.4 percent increase) but fell 1.1 percent month-over-month. Overall inventory levels declined, falling 25.3 percent from June 2011 and 2.4 percent from May this year.

ForeclosureRadar issued its Foreclosure Report for June on Wednesday, revealing that foreclosure sales fell significantly in the three largest foreclosure states in the company's coverage area. According to the report, foreclosure sales in California were down 13.4 percent over May and 48.8 percent over June 2011. Arizona and Nevada also saw a downturn in sales, showing month-over-month decreases of 18.5 percent and 14.6 percent, respectively. Year-over-year, Arizona's foreclosure sales were down 42.1 percent, while Nevada's sales fell 72.1 percent.

While negative equity still continues to hinder the housing market's recovery, CoreLogic reported Thursday that the share of underwater mortgages declined. In the first quarter of 2012, the total number of underwater homes was 11.4 million, accounting for 23.7 percent of all residential properties with a mortgage. In the fourth quarter of 2011, 12.1 million properties, or 25.2 percent, were underwater. In addition, more than 700,000 households saw their equity move into the positive territory in the first quarter of this year.

The number of markets showing sustained and measurable improvements rose to 84 in July from 80 in June, according to the First American Improving Markets Index (IMI) released from the National Association of Home Builders (NAHB). July's IMI includes 73 metros from June's list and 11 new additions. New list entries noted by NAHB were Prescott, Arizona; Springfield, Massachusetts; St. Cloud, Minnesota; and Houston, Texas. ""The modest increase in the July IMI is encouraging because it indicates that individual housing markets continue to regain their footing despite some recent reports of weakening in the broader economy,"" said NAHB Chief Economist David Crowe.

The 30-year fixed averaged 3.56 percent (0.7 point) for the week ending July 12, down from 3.62 percent the previous week. At the same time in 2011, the 30-year fixed averaged 4.51 percent. This week marks the 16th straight week that the 30-year average has stayed below 4 percent. The 15-year fixed also fell, averaging 2.86 percent (0.7 point), a drop from 2.89 percent last week. A year ago, the 15-year fixed averaged 3.65 percent.