Market Studies

Downturns in economic confidence hasn't shaken consumers' optimism in the housing market, Fannie Mae's National Housing Survey for June showed. According to the survey, the average home price expectation rose to 2 percent in June, up 0.6 percent from May and the highest recorded value since the survey began two years ago. In addition, 35 percent of respondents expect that home prices will go up in the next year, the highest level recorded since the survey's inception.

Once again, data compiled in the Obama administration's Housing Scorecard pointed to both signs of promise and reasons for concern. One positive indicator for housing was the 7.4 percent rise in home equity to $457.1 billion in the first quarter of 2012. On the downside, the impact of serious delinquencies and underwater mortgages continues to strain the housing market. One popular administration program for underwater borrowers is the Home Affordable Refinance Program (HARP). So far, HUD Acting Assistant Secretary Erika Poethig said almost half a million families have taken advantage of the program, and refinanced families save an average of $2,500 per year.

While still in positive territory, June marked another month of feeble gains in employment with the addition of 80,000 jobs. This was followed by 77,000 jobs added in May and 68,000 in April. While the second quarter gains look bleak in comparison to first quarter growth, Capital Economics said June's employment report doesn't mean the recovery has come to a complete halt - it has just lost momentum.

In a report released Thursday, Wells Fargo's Economics Group cautioned that although the housing recovery is picking up steam, the good news needs to be placed in the larger context of a weakened market. The Housing Data Wrap-Up for June 2012 shows that even with the overall economy slowing, the recovery in the housing market seems to be picking up momentum. A mild winter boosted construction in the Northeast and Midwest during what is traditionally a slow season, giving builders more inventory to sell in the spring.

Out of 11 categories of loan types, only home equity lines of credit (HELOC) rose, according to a report from the American Bankers Association (ABA). The report showed that for the first quarter of 2012, the delinquency rate for open-end home equity lines of credit rose from 1.69 percent to 1.78 percent. Open-end loans are those with a fixed amount of available credit but a balance that changes based on usage. ABA Chief Economist James Chessen attributed the increase to the painful adjustment still underway in the housing sector.

The nation added 80,000 jobs in June, making job growth in the second quarter 225,000 - the weakest quarterly gain in jobs since the third quarter of 2010 when the economy lost 136,000 jobs. The closely watched unemployment rate remained at 8.2 percent, unchanged from May.

After falling flat in May, asking prices went up in June, and rent prices continued to see significant increases, according to Trulia reports released Tuesday. Asking prices on listed homes made a 0.3 percent month-over-month and year-over-year increase in June, according to Trulia's price monitor. Phoenix and two Florida metros posted double digit gains, but Trulia warned that some of the top performing metros are facing another wave of foreclosures.

The search for a new low is still on as fixed-rates continue to break record-lows week after week. According to Freddie Mac's survey, fixed rates fell again following reports showing a slowdown in consumer spending and the manufacturing industry. The 30-year fixed-rate mortgage fell to 3.62 percent (0.8 point) for the week ending July 5. Last week, it averaged 3.66 percent. The 15-year fixed-rate dropped down to 2.89 percent (0.7 point) from last week's 2.94 percent.

First time claims for unemployment insurance fell a sharp 14,000 to 374,000 for the week ended June 30, the Labor Department the largest drop in nine weeks, reported Thursday. The prior week's total was revised up to 388,000 from the originally reported 386,000.

Certain regions that once dragged the housing market down are expected to start giving the industry a lift while national home values are expected to start leveling, according to forecasts from Veros Real Estate Solutions. The VeroFORECAST projects that in the 12-month period ending June 1, 2013, prices should improve from last quarter's 0.86 percent forecast depreciation to this period's 0.26 percent forecast depreciation. Phoenix is expected to appreciate the most at 6.4 percent. The Reno-Sparks region in Nevada is expected move in the opposite direction and depreciated by five percent.