Market Studies

Foreclosures are claiming a smaller share of the Phoenix sales market. The ratio has dropped for three straight months, according to a new report from Arizona State University's business school. In May, foreclosures represented about 35 percent of existing-home transactions in the Phoenix area, down from 43 percent earlier in the year. Still, the university's real estate professor says he's doubtful foreclosures will cease to be the dominant force in the market. More than 3,500 foreclosures occurred in the Phoenix metro last month.

Third-party investors are reselling foreclosure properties they've scooped up at auction at a rapid pace in states along the country's Western seaboard. In fact, they're moving distressed homes faster than lenders, according to a local tracking firm. ForeclosureRadar says the resell timeframe for foreclosure investors has dropped throughout its five-state coverage area. The company says it's partially due to spring selling activity, but more to do with a lack of quality, affordable homes for sale as a result of foreclosure delays.

The nation's Capitol stands out as the ""shining star"" in nearly every market report that crosses the wire. Washington, D.C. has consistently resisted home price declines, sales activity bucks widespread trends, and foreclosure numbers, too, have been almost non-existent due to an unofficial moratorium. Is it the absence of foreclosure property that's behind D.C.'s defiant market performance and will it turn now that emergency mediation rules have been enacted to restart foreclosures? Local experts say no, D.C. is just a market to itself.

The Federal Housing Finance Agency (FHFA) issued its third report to Congress Monday, detailing the regulator's 2010 annual examinations of Fannie Mae and Freddie Mac. The GSEs' losses last year totaled $28 billion, versus $94 billion in 2009. The amount of taxpayer support needed by the two mortgage giants also narrowed, but FHFA says both Fannie and Freddie remain ""critical supervisory concerns,"" primarily because of continuing credit losses from loans originated during 2005 through 2007.

Servicers completed 1,666 short sales and deeds-in-lieu (DIL) under the Home Affordable Foreclosure Alternatives (HAFA) program in April. That's up 73.7 percent from the number of HAFA transactions completed the month before. HAFA has been in place since April of 2010. According to Treasury's latest report, which covers program activity through April of this year, a total of 7,113 short sales and DILs have concluded through HAFA. Treasury says a short sale typically takes 120 days to complete under the program.

Prospective homebuyers cite worries about unemployment, property affordability, and the economy as issues that hold them back from jumping into the market, according to an industry survey commissioned by Genworth. But the mortgage insurer says these economic concerns have not translated into excessive mortgage stress among recent U.S. homebuyers. According to the survey, 87 percent of Americans who bought their first home in the past 12 months expect to easily meet their mortgage payment obligations in the coming year.

Home equity continued to head south during the first part of the year, but losses were eclipsed by another big jump in the value of financial assets as the stock market sustained positive movement. This, combined with a further reduction in overall debt levels, pushed household net worth higher during the first quarter, according to the Federal Reserve. Real estate assets lost $349 billion of their value over the first three months of 2011. The Fed says a mere 38 percent in homeowner equity is now the norm.

Weaker than expected job growth in May pushed both fixed- and adjustable-rate mortgages to new lows for the year, Freddie Mac reported Thursday. The GSE's study, which is based on data collected from about 125 lenders across the country, put the 30-year rate at 4.49 percent and the 15-year at 3.68 percent.

Prices on credit default swaps (CDS) involving subprime mortgages more than doubled their increase from last month, extending the rally to an unprecedented seventh straight month, according to the latest index results from Fitch Solutions. Subprime CDS prices rose 1.7 percent overall, though price increases were not uniform across vintages, with the 2007 leading the surge. Fitch says most vintages are in the black for the year. The lone negative outlier is the 2006 vintage.

The U.S. Treasury has released its regular monthly report card on the Home Affordable Modification Program (HAMP). New this time is an assessment of how the 10 largest HAMP servicers are performing. Four servicers have been designated as needing ""substantial"" improvement: Bank of America, JPMorgan Chase, Ocwen Loan Servicing, and Wells Fargo. Treasury says it will withhold financial incentives from three of these companies until they make identified improvements.