Market Studies

Housing counseling increases the likelihood that a homeowner will be granted a loan modification by 200 percent, according to a research study from the Federal Reserve. The central bank also found that counseled borrowers received more favorable terms on their loan modifications compared to borrowers who go it alone. The Homeownership Preservation Foundation says these, among other findings, show that mortgage counseling works, but the availability of these services are in jeopardy due to federal budget cuts.

Backlogged foreclosures, severe oversupply, and negative equity are pulling home prices down further, according to Radar Logic. The company tracks 25 major metropolitan areas across the country. Its latest index recorded a decline in the composite reading of 5.1 percent in April when compared to April 2010. The monthly sales rate remained more than 9 percent below April 2010. While sales of non-foreclosed homes increased more quickly than sales of foreclosed homes, RadarLogic says foreclosures are selling at an average discount of 39 percent.

The phenomenon of strategic default has become a growing concern within the industry, but a new ""Market Insight Snapshot"" released by Experian Thursday suggests the percentage of mortgage defaults involving borrowers who decided to simply throw in the towel is trending downward. Since strategic defaults hit 20 percent of all mortgages 60-plus days delinquent in the fourth quarter of 2008, they've come in below that mark ever since, according to the study. By mid-2010, the share of intentional walk-aways was 17 percent.

After the headline news that home prices double-dipped, forecasters are predicting a 2011 turning point for the U.S. housing market, according to the investment and risk management firm MacroMarkets. The company polled 108 economists and real estate experts this month to gauge their predictions. Nearly two-thirds believe the bottom for home prices arrived in the first quarter or will arrive sometime before year-end. The consensus, though, is that we should not be expecting a rebound in home values, but rather a level of price stability.

Twenty-eight percent of homebuyers in California who signed their name on the dotted line last month are buying REO properties. At the same time, short sale deals made up some 19 percent of the state's pending home sales in May. These are the latest figures released by the California Association of Realtors. While the state's 48 percent distressed market share is significant by all accounts, some areas of California are nearly fully saturated in distressed sales. In Madera County, REOs and short sales claimed 90 percent of all pending sales last month.

Freddie Mac said Thursday that mortgage interest rates, while mixed this week, held steady at low levels for the second straight week. The 30-year fixed rate matched last week's 4.50 percent average, while the 15-year rate edged up to 3.69 percent.

Commercial real estate prices (CRE) in the U.S. declined in April by 3.7 percent, according to a new report from Moody's Investors Service. It marked the index's lowest level since its inception, but Moody's says the price recovery that began a year ago among ""trophy properties"" in the largest markets is still evident and continuing. However, this decrease is the index's fifth consecutive decline with distressed prices negating the price recovery seen in larger, higher quality assets.

Home prices in the U.S. rose in April for the first time since last spring, the Federal Housing Finance Agency (FHFA) reported Wednesday. The agency's House Price Index recorded a 0.8 percent seasonally adjusted increase between March and April - the first month-over-month gain since May 2010. The index is calculated using purchase prices of houses backing mortgages that have been sold to or guaranteed by Fannie Mae and Freddie Mac.

The shadow inventory of repossessed and soon-to-be repossessed homes not yet visible to the market has been trimmed, according to CoreLogic. The company reports that as of April 2011, the industry's shadow supply fell to 1.7 million units, down from 1.9 million a year earlier. CoreLogic attributes the decline to fewer new delinquencies and a high level of distressed sales, which has helped to reduce the deluge of foreclosure properties on a market already beset by a supply and demand imbalance.

Data released by Lender Processing Services (LPS) Tuesday puts the number of home mortgages that are delinquent or in foreclosure at 6,350,000. The company's assessment is based on mortgage performance statistics derived from its loan-level database through the end of the month of May. In April, LPS reported that there were 6,388,000 mortgages going unpaid. The month-over-month decline can be attributed to both a decrease in the national delinquency rate and a drop in foreclosure inventories.