Market Studies

Home prices rose 0.8 percent in July, marking the fourth consecutive monthly increase, according to the latest home price index from CoreLogic. Capital Economics responded to CoreLogic's report saying, its analysts ""are wary"" of reading too much into the ""fairly optimistic"" house price report because prices have yet to respond to the recent weakening in consumer demand. Despite the monthly increase, Corelogic says home prices are down 5.2 percent from where they stood a year ago.

Title insurance companies wrote $2.30 billion in premiums throughout the second quarter of 2011, down from $2.33 billion in the second quarter of 2010, according to the American Land Title Association's (ALTA) preliminary 2011 second-quarter market share analysis. At the same time, premiums increased in 21 states and Washington, D.C. The biggest premium gains were seen in Iowa and South Dakota. Fidelity underwriters claimed the largest market share, with more than a third of the new business.

The average mortgage loan in foreclosure has been delinquent for 599 days, according to Lender Processing Services (LPS). That's a record for the company's regular monthly study on mortgage performance trends. As of the end of July, LPS counted 2.2 million loans that were in foreclosure and nearly 1.9 million that were over 90 days past due but had not yet started the foreclosure process. The company also found that 38 percent of July's foreclosure starts were repeat foreclosures.

Home prices increased 3.6 percent over the second quarter of this year, after having fallen 4.1 percent in the first quarter, according to the latest S&P/Case Shiller index. With the second quarter's data, the national index reading recovered from the double-dip cyclical low hit at the end of the first quarter, but still posted an annual decline of 5.9 percent when compared to the second quarter of 2010. Nationally, home prices are back to their early 2003 levels, according to Standard & Poor's.

Pending home sales decreased overall and in three of the four national regions in July, according to the National Association of Realtors (NAR). However, nationally and in all four regions, pending sales remain higher than one year ago. The West was the only region to post a month-over-month increase, with sales contracts up 3.6 percent. Despite recent declines in pending sales for most of the country, NAR says contract activity over the past three months is fairly comparable to the first part of this year.

The default risk associated with newly originated mortgages continues to improve, according to the analysts at University Financial Associates (UFA). The company's default risk index for the third quarter indicates that with today's economic conditions, lenders and investors should expect defaults on new loans to be 32 percent higher than loans from the 1990s. That's down from an elevated risk of 41 percent during the first part of this year. UFA says at this rate, ""normalcy may not be far away"" for default and prepayment indicators.

Default rates on both first and second mortgages declined in July, according to the S&P/Experian Consumer Credit Default Indices. Second mortgage defaults decreased from 1.4 percent in June to 1.25 percent. The first mortgage default rate for the month of July was 1.93 percent, down from 2.02 percent the previous month. Both measurements also declined from a year earlier. S&P says July's data support the downward trend the company has observed over the past two years.

California's pending home sales dipped in July, as did the share of distressed property sales. The California Association of Realtors says 44.5 percent of home sales contracts last month involved distressed properties. That's down from both the previous month and a year earlier. Short sales made up 17.5 percent of total sales. The state's Realtors have sent letters to the largest lenders with ideas on how the process can be improved and calling for their immediate attention.

Mortgage rates moved higher this week off the previous week's record lows as Treasury bond yields rose and other housing data showed improvement. One anomaly was the 5-year adjustable-rate mortgage, which declined one-tenths of a percentage point to set a new all-time low. The 30-year fixed rate rose to 4.22 percent, while the 15-year rate came in at 3.44 percent.

Short sales shot up 19 percent between the first and second quarters, with 102,407 transactions completed during the April-to-June period, according to RealtyTrac. Over the same timeframe, a total of 162,680 bank-owned REO homes sold to third parties, virtually unchanged from the first quarter. RealtyTrac's study also found that the time to complete a short sale is down, while the time it takes to sell an REO has lengthened. Discounts on both types of distressed properties increased last quarter.