Market Studies

First time claims for unemployment insurance jumped 13,000 to 380,000 for the week ended April 7, the Labor Department reported Thursday, the highest level since the end of January. At the same time the previous week’s report were adjusted upward by 10,000, wiping out what had been a four year low and showing an increase of 4,000 initial claims instead of an originally reported drop of 6,000 for the week ended March 31.

Foreclosure filings - default notices, scheduled auctions, and bank repossessions - were reported on 572,928 properties during the 2012 first quarter, down 2 percent from the previous quarter and down 16 percent from the first quarter of 2011, according to RealtyTrac's U.S. Foreclosure Market report. Also, the number of days it took to foreclose on properties in the first quarter took longer, averaging 370 days, up from 348 days in the previous quarter and the highest average number of days going back to the first quarter of 2007.

Single-family rental investing is a $3 trillion market, according to a CoreLogic’s MarketPulse report, which further stated that the single-family rental market accounts for $21 million rental units, or 52 percent of the residential rental market. With reports showing rental prices have gone up and home prices have decreased, it's no surprise that large investors have shown interest in buying up single-family homes at a discount to convert them to rental units. Based on the 26 major markets CoreLogic assessed, the markets that yield the highest single-family rental cap rates were generally in Florida or the Midwest.

The economy continued to expand at a modest to moderate pace from mid-February through late March, the Federal Reserve said Wednesday in its periodic Beige Book, reporting faster and solid growth in Kansas City and Minneapolis but moderate or modest growth in Boston, Atlanta, Chicago, Dallas, San Francisco Cleveland and St. Louis. New York reported economic growth picked up somewhat while Philadelphia and Richmond cited improving business conditions.

Home prices for January 2012 dropped 0.9 percent, an even greater increase from the 0.4 percent drop in December 2011, according to Lender Processing Services' Home Price Index (HPI). For January, home prices averaged at $195,000, dropping from December’s average of $196,000.

Mortgages are becoming more and more of a litigious matter, with the number of mortgage-related cases reaching an all-time high since being tracked in 2007, according to Mortgage Daily's 2011 fourth quarter Mortgage Litigation Index. At 244, the number of cases rose from 218 in the 2011 third quarter and from 151 over the same period a year earlier. Foreclosure-related litigation cases reached 99 and accounted for 40 percent of all cases. One attorney attributes the increase to a high level of awareness among borrowers that foreclosure-related issues can be litigated, sometimes successfully.

According to the March 2012 Fannie Mae National Housing Survey, 48 percent of Americans who responded expect rental prices to increase, and the expectation is that they will go up by 4.1 percent over the next 12 months, the biggest projected increase recorded to date. Also, 33 percent of respondents expect home prices to increase over the next 12 months. Americans project home prices will go up by 0.9 percent over the same time period. If respondents were going to move, 66 percent say they would buy a home.

The Obama Administration released its March Housing Scorecard Friday, which showed delinquencies on a downward decline, while modifications continue to help struggling homeowners through reduced monthly payments. Foreclosure completions were down though, but delays are expected to pick up due to the mortgage settlement, which just received approval from a federal judge Friday.

Mortgage lenders remain cautious in terms of credit quality, down payments, and valuations, as evidenced by the findings outlined in the new Origination Insight Report generated by Ellie Mae. The report series tracks the current lending environment for refinance and purchase mortgages, and it indicates the average credit score for loans approved and closed is steadily rising, while acceptable loan-to-value (LTV) ratios are declining. Ellie Mae says mortgage loans closed in February carried an average credit score of 750, with an LTV of 76 percent.

The nation added 120,000 jobs in March, far below expectations of the fourth straight month of 200,000-plus payroll gains. Payroll gains for January and February were revised, adding 13,000 to the February numbers but subtracting 9,000 from January.