Market Studies

A deteriorating housing picture, coupled with an increase in expenses and a drop in consumer confidence, led to a sharp decline in consumers' financial health during the third quarter. The nonprofit credit counseling agency CredAbility puts out a regular quarterly index measuring consumer distress. Between July and September, the gauge recorded its largest drop since the third quarter of 2008. CredAbility's data show the average consumer has been in distress for 12 straight quarters now.

Data released by Freddie Mac shows the average rate for a fixed-rate mortgage with a 30-year term has hovered at or below the 4.00 percent threshold for three consecutive weeks. The GSE's latest study, averaging rate data from 125 lenders for the week ending November 17, puts the 30-year fixed-rate mortgage at exactly 4.00 percent. The 15-year fixed-rate mortgage, a popular refinancing choice, averaged 3.31 percent.

The Mortgage Bankers Association (MBA) reported Thursday that the national delinquency rate for residential home loans fell to 7.99 percent in the third quarter. That's the lowest reading since the fourth quarter of 2008. The delinquency rate encompasses borrowers who have missed one or more payments but are not yet in foreclosure. While delinquencies fell, the number of borrowers entering the foreclosure process rose for the first time in a year, driven by a handful of servicers and hard-hit states.

HOPE NOW announced a major milestone Tuesday -- the completion of 5 million loan modifications since the group began tracking such loss mitigation efforts in 2007. More than 80 percent of these modifications were completed through servicers' own proprietary programs, with the rest coming from the government's Home Affordable Modification Program. Officials called the 5 million mark a halfway point, adding that much more work needs to be done to help distressed homeowners.

Estimates of the industry's shadow inventory vary widely, but one thing analysts do agree on is that the overhang is massive and will likely weigh on market dynamics for years to come. Measurements of soon-to-be repossessed and foreclosed homes that have yet to hit the market range from 1.6 million to 8.2 million. Capital Economics' assessment falls in the middle of that range, and the company's analysts say if anything, theirs is probably an underestimate. They put the industry's shadow inventory at 4.3 million homes.

National home prices have been on the decline since June 2006 with a few bursts of increases, which Lender Processing Services (LPS) attributes to seasonal trends. Overall, prices have declined 28.3 percent since their peak in June 2006, according to LPS' new home price index. The company reports home prices fell 0.9 percent across the nation in August, after a smaller 0.4 percent decline the previous month. The largest price declines since the beginning of this year have occurred in Atlanta and Phoenix.

The average 30-year fixed-rate mortgage came in at 3.99 percent this week, according to data released Thursday by Freddie Mac. It's the second time this year the rate has dropped below the 4.00 percent mark, and is the second lowest reading in the history of the GSE's survey. It averaged 3.94 percent for the week ending October 6, 2011. Freddie Mac described rate movement overall as ""changing little"" amid a mix of economic data reports, with most loan products up or down just 1 to 2 basis points.

Home prices rose 4 percent during the third quarter, according to the latest IAS360 index from Integrated Asset Services. The index also posted a 0.4 percent gain from the beginning of the year and a 0.6 percent gain from the third quarter of last year. ""I did a double-take when I saw the numbers,"" says Paul Sveen, CEO of Integrated Asset Services. He says the market is behaving like it's already hit bottom, but it's likely just the calm before the storm considering the large volume of distressed properties hidden in the shadows.

Foreclosure filings in October rose 7 percent from the previous month, RealtyTrac said Thursday. Including default notices, scheduled auctions, and bank repossessions, filings were reported on 230,678 U.S. properties in October. That's down nearly 31 percent from a year earlier, when servicers began putting the brakes on foreclosure actions due to paperwork issues. But RealtyTrac has documented a rise in filings for three consecutive months now - a sign that servicers are working through the backlog of cases that have been delayed.

As Americans consider the best candidates for the 2012 presidential and congressional elections, housing is at the forefront of the debate for many. About 70 percent of Americans say a candidate's position on housing could sway their vote, according to a survey released by Move, Inc. However, Americans differ in their views of what the housing market needs most. The survey found 30.9 percent of Americans believe the next president's priority for his or her first 100 days in office should be helping homeowners avoid foreclosures.