Market Studies

Now that the federal government's homebuyer tax credit stimulus is in the rear view mirror, residential home sales are in a period of correction, according to RE/MAX. The real estate conglomerate's July housing report tracks market conditions in 54 major metropolitan areas across the country. It revealed that closed transactions in July were 27.8 percent lower, while prices were 1.3 percent higher than during July 2009. Home prices in California marked the highest year-to-year gains in the survey, accompanied by Honolulu and Boston.

First-time homebuyers continued to desert the housing market in July, according to a new industry study released Monday. Campbell Surveys says first-time homebuyers accounted for only 39 percent of the home purchase market last month. That's down from a peak of 48 percent as recently as March. The research firm, though, reported that short sales remain one of the few bright spots in the housing market. Time-on-market for short sales continued to decline, from an average of 20.5 weeks in February to 15.8 weeks in July.

One in four real estate professionals polled by Clear Capital said the BP oil spill has brought home sales to a halt and is pushing already depressed property values lower along the Gulf Coast, with the impact even spreading beyond the coastal region to nearby areas that have seen no physical damage from the environmental catastrophe. Areas of Alabama and the Florida Panhandle are reporting an estimated 5-15 percent decline in home values and a drop in sales volume in June ranging from 25 percent to 33 percent.

About 50 percent of the loans held by Fannie Mae and Freddie Mac come from the nation's four largest banks - Bank of America, JPMorgan Chase, Wells Fargo, and Citi. Lately, the GSEs have become more aggressive in forcing originators to buy back bad loans. Based on Fannie and Freddie's current ""distressed"" numbers (a combined $354 billion in delinquent mortgages and REOs), Fitch Ratings estimates that the big four could be on the hook to repurchase as much as $180 billion in nonperforming assets.

Real estate prices on U.S. commercial properties dropped 4 percent in June, according to data released by Moody's Investors Service Thursday. The decline followed two months of price increases, illustrating that ""performance remains choppy"" in the commercial real estate sector, the New York-based ratings agency said. Moody's index is now 41.4 percent below the peak that was recorded in October 2007, but 4.2 percent above the recession low that occurred in October 2009.

Mortgage fraud has become more prevalent over the past couple of years as perpetrators look to capitalize on deteriorated market conditions. But a new study released by Interthinx this week indicates that mortgages are now less likely to involve fraud than they were during the first part of this year. The company says its national mortgage fraud risk index declined 3 percent during the second quarter, but Interthinx warns that areas already feeling the effects of past fraudulent transactions are finding mortgage fraud hard to eradicate.

Mortgage interest rates dropped again this week, according to data released Thursday by Freddie Mac. The GSE says for yet another week, fixed-rate mortgages reached new record lows. Rates for 30-year mortgages are now averaging 4.42 percent, while 15-year fixed mortgages are at 3.90 percent. Amy Crews Cutts, Freddie Mac's deputy chief economist, says investors in long-term bonds appear confident that inflation will remain in check, which in turn has helped to push mortgage rates even lower.

The industry has completed about 975,000 permanent loan modifications so far in 2010, according to estimates released this week by the HOPE NOW Alliance. Of those, only a third have been processed under the umbrella of the federal government's Home Affordable Modification Program (HAMP). Two-thirds have been servicers' own proprietary mod programs. HOPE NOW also reports, though, that servicers have initiated more than 1.2 million foreclosures this year.

Consumer interest in buying homes and absorption of today's bloated housing supply are critical to recovery. These market fundamentals, though, are moving farther out of reach as the American Dream of homeownership fades into the background for many. A new study from real estate data provider Trulia found that one out of four renters do not plan on buying a home -- ever. Of those renters who do see a home purchase in their future, 68 percent said it would be more than two years before they make that investment.

Mortgage rates are hitting record lows, but some fees associated with buying a home are getting higher. According to Bankrate.com's annual survey of closing costs, origination and third-party fees on a $200,000 mortgage are now averaging $3,741. This marks a 36.6 percent increase over 2009's average. New York and Texas claim the nation's highest closing costs, while Arkansas is the least expensive state.