Market Studies

According to data from Clear Capital, over the last year, REO prices have increased 5.5 percent, while fair market sales prices dropped 2.9 percent. The real estate data provider explained that demand for REOs is most likely causing the increase in prices and named Carrington Holding Company, Amherst Securities Group, and Waypoint Financial as examples of investors purchasing single-family REOs with the purpose of converting them into rental properties.

With an upsurge in demand, banks resumed tightening standards for residential mortgage loans, the Federal Reserve reported Monday (April 30) in its quarterly survey of bank lending standards. According to the survey, a net 30.2 percent of banks surveyed in the Senior Loan Officer Opinion Survey reported increased demand in the first quarter for traditional mortgage loans compared with a net 3.8 percent reporting stronger demand in the fourth quarter. According to the survey though, a net 1.9 percent of survey respondents reported tightening loan standards compared with the first quarter when a net 5.7 percent said they were easing standards.

The nation’s homeownership rate (seasonally adjusted) dropped to 65.4 percent in the first quarter, its lowest level since the first quarter of 1997, the Census Bureau reported Monday. The homeownership rate fell in all four census regions in the first quarter – the steepest drop in the Northeast, 1.2 percentage points to 62.5 percent. The homeownership rate fell 0.8 percentage points in the South to 67.5 percent; 0.5 percentage points in the Midwest to 69.5 percent, and 0.2 percentage points in the West to 59.9 percent. At the same, the homeowner vacancy rate fell to 2.2 percent nationwide, down from 2.6 percent in the first quarter of 2011, and the rental vacancy rate dropped to 8.8 percent from 9.7 percent one year earlier.

Consumer spending grew just 0.3 percent in March, down from the 0.9 percent growth in February, the Bureau of Economic Analysis reported Monday. Economists had expected spending to be up 0.4 percent. At the same time, personal income grew 0.4 percent in March, BEA said, slightly faster than February's 0.3 percent growth and consensus expectation of 0.3 percent. Personal savings as a percentage of disposable (after tax) income edged up to 3.8 percent in March from 3.7 percent in February; it had been 4.3 percent in January.

While Radar Logic reported home prices in February showed a month-over-month increase, the real estate data provider sees this trend as possibly being temporary, considering that warm weather and investment buying helped to drive up sales. Home prices increased 1.9 percent over the month ending February 16, according to Radar Logic's RPX Composite Price, which tracks 25 major metropolitan areas. This increase was bolstered by strong sales in February, with sales from institutional investors increasing significantly since 2009 in certain metros, especially the hardest hit areas.

Fixed mortgage rates slipped further down, maintaining their near-record low averages despite evidence of an improving economy, according to Freddie Mac's Primary Mortgage Market Survey. The Fed stated that it expects economic growth to remain moderate and then pick up gradually. The 30-year fixed-rate mortgage, which has been below 4 percent every week in 2012 except one so far, averaged 3.88 percent (0.7 point), a drop from last week's average of 3.90 percent.

The Pending Home Sales Index (PHSI) rose sharply in March to 101.4 from February’s revised 97.4, the National Association of Realtors reported Thursday. Economist had expected the index to increase 1.0 percent from February. The index is now at the highest level since April 2010 when it reached 111. The index improved for the third straight month and fifth time in the last 6 months. The March reading is up 12.8 percent from March 2011, the strongest year-over-year gain since last July when the index was 15.4 percent over its year-earlier level.

While 114 out of 212 metropolitan areas with a population of 200,000 or more saw increases in foreclosure activity during the 2012 first quarter, activity was still down compared to the same quarter a year ago, according to RealtyTrac's 2012 first quarter Metropolitan Foreclosure Market Report. Last year, 135 out of 212 metros areas saw increases in foreclosure activity in the first quarter.

Mortgage delinquencies fell back on both a monthly and annual basis in March, according to preliminary market data released by Lender Processing Services (LPS) for the month. The company's estimation puts the national delinquency rate - measured as 30 or more days past due but not in foreclosure - at 7.09 percent. At the same time, the foreclosure rate inched up ever so slightly to 4.14 percent. Altogether, the numbers equate to just over five-and-a-half million properties in foreclosure or past due on their debt.

California may have some rough patches in it, but overall, with the worst part of the housing crises appearing to be over, the state is seeing fewer delinquencies and losing a smaller number of homes to foreclosure, according to a San Diego-based real estate data provider. A total of 56,258 Notices of Default (NODs) were recorded at county recorders offices in California during the first quarter of 2012, the lowest level since the second quarter of 2007 when 53,943 NODs were recorded, according to DataQuick. NOD filings peaked in the first quarter of 2009 at 135,431.