Market Studies

The credit bureau TransUnion says U.S. consumers are less of a credit risk now than they were in 2009 and earlier this year. The agency's proprietary Credit Risk Index declined 0.9 percent between the first and second quarters of 2010. The drop was more than double the decrease observed between the fourth quarter of 2009 and the first quarter of 2010. TransUnion says it signals that ""a broad improvement in consumer credit conditions is finally taking root.""

The volume of home loan applications submitted to lenders last week fell 1.4 percent compared to the week prior, according to the Mortgage Bankers Association (MBA). Overall mortgage activity was marred by a drop in both refinance requests and home purchase applications despite the fact that interest rates headed lower.

The analysts at Moody's are downbeat in their outlook for both the U.S. economy and the housing market. They warn that the there's a stronger chance the country will slide back into a recession, and they are forecasting a longer and deeper housing correction. Because of weak housing demand, soft job creation, and the slow speed at which the industry is working through distressed mortgages, Moody's says recovery is already back-sliding into a double-dip. The agency expects house prices to fall until the third quarter of next year.

Given the relative stability of Canadian housing markets, many observers try to draw comparisons between the housing finance policies of Canada and its southern neighbor the United States. Why is it the U.S. suffered through such a painful housing bubble and bust in the last decade, while Canada did not? Despite similarities in their homeownership rates and mortgage lending dominated by government backing, the fates of the two countries' housing markets took very divergent paths.

With housing woes capturing front-page headlines in the United States, the odds of distraught homeowners becoming even more frustrated and opting to abandon their mortgage obligations has become a growing concern within the industry. A survey by the Pew Research Center found that more than a third - 36 percent - of Americans believe the practice of ""walking away"" from their mortgage payments and their home is acceptable, at least under certain circumstances.

Fannie Mae has conducted a poll of both homeowners and renters to gauge consumers' attitudes toward housing in the U.S. The results indicate that Americans have become more cautious about buying a home, though most believe the market has bottomed out. Rents are expected to increase more than home prices, and Fannie says mortgage borrowers, and even underwater borrowers, are less discouraged about homeownership than delinquent borrowers and renters.

Two closely-watched industry studies that track weekly mortgage interest rates were sending mixed signals on Thursday. The good news for homebuyers and borrowers looking to refinance is that rates are still hovering near 50-year lows. Freddie Mac reported that the 30-year rate edged up to 4.37 percent this week, while the 15-year rate dropped to 3.82 percent. Bankrate reported declines across the board.

Lender Processing Services (LPS) is offering a sneak peak at its upcoming mortgage market report, scheduled for release September 24. The company's study will show that the national home loan delinquency rate has retreated, while the foreclosure rate is on the rise. LPS says the numbers are a sign that more delinquent loans are entering the foreclosure process, as servicers pick up the pace working through their default backlogs. According to LPS, the country's inventory of pre-sale foreclosures stood at 2,038,000 at the end of August.

The number of homes taken back by lenders hit a new record high last month. RealtyTrac says lenders foreclosed on 95,364 U.S. properties in August, about 2 percent higher than the previous peak recorded in May. RealtyTrac's report shows overall foreclosure activity - including default notices, scheduled auctions, and REOs - jumped 4 percent between July and August. But the company says it's seeing a balance in the trend lines -- while bank repossessions are up, new default notices are down.

CoreLogic released its Home Price Index Wednesday, which showed that residential property values in the United States remained flat in July as transaction volumes continued to decline. It was the first time in five months that CoreLogic reported no year-over-year gains, and the company says a growing number of declining markets underscore weakness in the housing market without tax-credit support. Home prices actually fell in 36 states in July, the highest number since last November when national home prices were steadily declining.