Market Studies

Foreclosure activity in May was marked by lenders being impacted by local market conditions rather than any national trend, according to ForeclosureRadar's May 2012 Foreclosure Report. The report examined all foreclosure activity - sales, starts, and timelines - for Arizona, California, Nevada, Oregon, and Washington in the month of May. While foreclosure starts and sales rose overall between the five states, individual activity widely varied.

Through National Foreclosure Mitigation Counseling (NFMC), more than 1.3 million homeowners have received foreclosure prevention counseling by local nonprofits and state housing finance agencies since March 2008, NeighborWorks America announced Monday. So far, the NFMC has also received six appropriations from Congress totaling $619.87 million. According to a report, NFMC clients who had their payments modified saved an average of $176 more per month, and those who received help were nearly twice as likely to obtain a modification.

Declines in the share of REO properties and in the months' supply of unsold inventory are all leading to a revival in home prices, and these drops are being driven, in part, by negative equity, CoreLogic concluded in a report. Prices rose by 1.1 percent in April compared to the year before and 2.2 percent from the month before in March. One factor helping boost prices is the decreasing months' supply of homes. While a lower supply during a time of increasing demand is a positive for home prices, Sam Khater, chief economist for CoreLogic and author of the report, explained negative equity is the main reason behind the low supply, not an increase in sales. Negative equity not only makes consumers more reluctant to buy, but it can also discourage homeowners from selling, leading to a smaller number of homes listed on the market.

Feelings about homeownership remain positive in the face of a diminished market, but an uncertain economy and increasing down payments are keeping Americans from making purchases, a report from Integra Realty Resources (IRR) said. Wednesday's report detailed results from an IRR-commissioned survey of non-homeowners ages 22-50 in 11 major markets. While 85 percent of potential buyers indicated that market conditions are favorable for purchasing a home, unemployment and job instability make many respondents reluctant or unable to buy a home.

Negative reports on the economy may be shaking up confidence, but Capital Economics released a report Friday stating that in their view, the foundations for a sustainable recovery are still in place. The employment situation in the U.S. and issues overseas such as the euro-zone crises are all taking a toll on the economy and consumer confidence. Yet, there are still reasons to make the argument that the recovery is not going to be derailed. Home sales and prices have increased, and mortgage affordability continues to be at an all-time high.

CoreLogic's third annual Storm Surge Report, released Thursday, showed that just over four million homes in the United States are at risk of hurricane-driven storm surge damage. According to the report, there is $700 billion in total property exposure in the Gulf and Atlantic Coast regions, the areas most likely to face storm surge activity. The Gulf Coast houses just under 1.8 million homes at risk for potential storm-surge damage (totaling nearly $200 billion in exposure), while the Atlantic Coast has approximately 2.2 million homes at risk ($500 billion in exposure).

Reperforming and nonperforming loans decreased $6.1 billion to $528.6 billion in May compared to the previous month of April for private label mortgage backed securities (MBS), according to a report from Amherst Securities Group. The decrease came after a reduction of $6.4 billion in the non-performing bucket and a $0.3 billion growth in the re-performing bucket, reflecting elevated liquidations and a slowdown of new defaults, Amherst stated in the report.

Lulls in employment and income growth led to a plateau in consumer sentiment in May, according to Fannie Mae's May 2012 National Housing Survey. The data released by Fannie Mae on Thursday showed that although many consumers (72 percent) believe that now is a good time to purchase a house, the percentage of respondents who said they would buy a house after moving actually dropped for the second consecutive month-63 percent in May compared to 64 percent in April and 66 percent in March. Fifteen percent of respondents said now is a good time to sell a home.

As the employment situation continues to raise concerns, fixed rates fell even lower, slipping yet again to new record-lows, according to a survey from Freddie Mac released Thursday. The 30-year fixed-rate mortgage averaged 3.67 percent (0.7 point) for the week ending June 7, falling from last week's average of 3.75 percent. The 15-year fixed rate declined even further below 3 percent to 2.94 percent (0.7 point), down from last week's 2.97 percent.

First time claims for unemployment insurance fell to 377,000 for the week ended June 2, from the prior week's upwardly revised 389,000, the Labor Department reported Thursday. Economists had expected the report would be show 379,000 initial claims. The drop in claims was the first in five weeks.