Market Studies

Lender Processing Services says data it's collected through the end of June show an abrupt increase in the industry's mortgage delinquency rate and a smaller uptick in the national foreclosure inventory. The company reports the share of home loans 30 or more days past due but not yet in foreclosure rose to 8.15 percent last month, while the foreclosure rate edged up to 4.12 percent. Altogether, there are some 6,452,000 mortgages going unpaid in the United States.

For the second quarter of 2011, California homes entering the foreclosure process decreased to their lowest rate in four years, according to DataQuick, a San Diego-based company that tracks nationwide real estate activity. The number of notices of default decreased 17 percent from April to June when compared with the previous quarter and 19.2 percent when compared with the second quarter of last year. It was the lowest rate reported since the second quarter of 2007.

Foreclosures and short sales made up 30 percent of all existing-home sales in June, according to the National Association of Realtors. Overall sales volume slipped in June along with the share of distressed properties. Total existing-home sales declined 0.8 percent to an annual rate of 4.77 million, the trade group's lowest reading since last November. Without a strong rebound in the months ahead, 2011 is on pace to be the fourth time in the last five years where home sales have declined on an annual basis.

For some borrowers, negative equity can become their rationale to stop making mortgage payments. The risk of such strategic default is rising among loans that have ""always performed,"" according to the credit analysts at Moody's Analytics. The agency found that these always-performing loans tend to be concentrated in robust housing markets that have held home values above the national average, but it's these areas where we may soon see a renewed increase in strategic defaults.

Home sales are expected to outpace 2010 sales by 3 to 5 percent for the remainder of 2011 as the housing market follows the overall economy, according to Freddie Mac. The GSE's latest outlook, released Monday, suggests the housing market is not likely to see a full ""double dip."" According to the report, June's disappointing jobs report likely reflects a temporary ""soft patch"" in the economy rather than an inflection point in economic growth. Freddie's economists expect housing to shadow GDP forecasts and improve over the balance of 2011.

In recent years, the nation's homeownership rate has dropped closer to historical averages, after hitting an all-time high of 69.2 percent in 2004. The rate may fall even further, according to a paper by the Mortgage Bankers Association's Research Institute for Housing America (RIHA). The first-quarter U.S. homeownership rate was 66.4 percent, and analysts at RIHA suggest homeownership could drop by one or two more percentage points due to factors such as tightened credit.

Last year, banks seized more than one million properties. Lax underwriting standards during the boom years served as the catalyst for a housing bust that upended not only the mortgage market but the entire U.S. financial system, and has left scores of foreclosures, delinquencies, and vacant homes in its wake. In order to see what changes the lending community has made, the ratings agency DBRS decided to do a side-by-side comparison of the criteria for obtaining a prime mortgage in 2007 versus today's requirements for prime qualification.

At current the current sales pace, Orlando has a 4.37-month supply of homes. This is the lowest rate reported since December 2005. The average home sold in Orlando in June sold for 95.15 percent of its listing price.

June marks the fourth straight month of increasing home prices while also showing a rise in sales transactions, according to RE/MAX's National Housing Report for June 2011. While demonstrating a 4.9 percent drop in prices on a year-over-year basis, the drop was smaller than it has been the previous three months. Closed transactions in June rose 7.4 percent from May but showed a year-over-year decline of 10.6 percent. The median sales price in June 2011 was $193,791, while the June 2010 median was $203,887.

Despite a recent trend in increasing foreclosure times, the average time it took to foreclose properties in California, Arizona, and Nevada decreased in June 2011, according to ForeclosureRadar. While monthly numbers decreased in three states, year-over-year numbers still show an increase in the five West-coast states included in the firm's monthly report. ForeclosureRadar covers Arizona, California, Nevada, Oregon, and Washington. Foreclosure filings decreased in the five states in Foreclosure Radar's report.