Market Studies

Home prices in the United States rose in May on both a month-over-month and year-over-year basis, Standard & Poor's reported Tuesday. The S&P/Case Shiller 20-city home price composite increased 1.2 percent between April and May and 4.6 compared to a year ago. The gains posted in the latest installment of the closely watched index were much larger than the market expected, but analysts warn that the plus-signs are only making a temporary showing, reflecting a strong spring selling season and the residual effects of the homebuyer tax credit.

A drop in homebuyer activity following the contract deadline for the federal tax credit helped trigger a noticeable decline in home prices between May and June, according to a study by Campbell Surveys. The company found that prices fell in three out of four property categories last month. Average prices tumbled by 6.8 percent for move-in ready foreclosed properties, 6.3 percent for short sales, and 4.6 percent for non-distressed properties. In contrast, prices for damaged foreclosed properties increased by 5.9 percent.

The Illinois housing market showed signs of sustained stabilization in June as both home sales and prices continued to increase during the month, the Illinois Association of Realtors (IAR) recently reported. IAR said statewide total home sales - including single-family and condos - totaled 13,072 transactions in June 2010, jumping 18.3 percent from one year earlier. Additionally, IAR said June's median home price of $170,000 was up 2.5 percent from the same month last year.

In what seems to be an ever-increasing trend, sales of existing homes and condos in the Sunshine State continued to surge in June, Florida Realtors recently reported. According to the association's report, a total of 18,038 single-family existing homes sold in June 2010, jumping 15 percent from the same month last year. And data regarding existing-condo sales was even more impressive. With a total of 6,916 units sold last month, sales skyrocketed 33 percent from June 2009.

The number of California homeowners entering foreclosure dropped to its lowest level in three years during the second quarter of 2010, according to MDA DataQuick. Lenders filed a total of 70,051 notices of default (NODs) with county recorder offices during the April-to-June period. DataQuick says its the lowest total the company has reported since the second quarter of 2007, when 53,943 NODs were filed. The company says price rebounds, motivated sellers, and accommodating lenders have played a role in bringing default filings down.

The Federal Housing Finance Agency said U.S. house prices inched up 0.5 percent from April to May. This marked the third rise in as many months, leaving prices 1.6 percent above the recent trough. The question now: Will this trend last? According to a report released by Capital Economics, May home prices were most likely boosted by the lingering effect of the surge in demand generated by the homebuyer tax credit. The macroeconomics research consultancy said now that demand is falling, it won't be long before prices start to fall too.

The strides made by the Federal Housing Administration in lowering delinquency numbers are turning into a long-distance marathon run. The federal mortgage insurer's delinquency rate dropped again in June, marking the fifth straight month of declines. According to FHA's latest operations report, as of June 30, 532,757 of the mortgages it guarantees had spent at least 90 days in a delinquent status, which equates to a seriously delinquent rate of 8.3 percent. That's down from 8.4 percent in May, and 9.4 percent during the first month of this year.

Sales of existing homes fell further in June but still remained notably higher than year-ago levels, the National Association of Realtors (NAR) reported Thursday. According to NAR's study, existing-home sales came in at a seasonally adjusted annual rate of 5.37 million units in June, down 5.1 percent from May. However, sales were still 9.8 percent higher than the same period last year. June marked the second consecutive month-to-month drop in sales numbers, as housing inventory rose to an 8.9-month supply.

After holding mostly steady last week, mortgage rates resumed the journey downward this week to hit new record lows. Two industry reports released Thursday pointed to weakening confidence in the strength of the economy as the source of the week-to-week drop. According to Freddie Mac's survey, 30-year fixed-rate mortgages are now averaging 4.56 percent. Rates for 15-year fixed mortgages also fell to an average of 4.03 percent.

The number of foreclosures started by lenders in Massachusetts during the month of June decreased from a year earlier, the second straight month that petitions to foreclose have declined, according to a new report by the Boston-based research firm the Warren Group. But despite the drop in foreclosures initiated, the number of completed foreclosures more than doubled from a year earlier as lenders there work through heavy backlogs.