Market Studies

Although both new and existing home sales were down in May, it's not all bad news. According to a new survey by Relocation.com, more Americans are positioning themselves to purchase a home in the near future. The survey found that some families are opting to rent while they research for deals to purchase a more desirable home in their area. There's no surefire way to determine when these sidelined homebuyers will enter the market, but the survey results were encouraging.

Banks took back an average of 4,000 South Florida properties each month during the first half of 2010, according to a new report from the locally based real estate consultancy Condo Vultures. At the current rate, the company says nearly 50,000 homes will be repossessed in South Florida this year alone. One key reason the number of REOs has spiked is the implementation of a new online auction technology being used by county circuit courts to clear the backlog of foreclosed properties.

Very little activity was seen in the realm of mortgage rates this week, as the historical lows observed in weeks past held fairly steady, Freddie Mac and Bankrate reported Thursday. According to Freddie Mac's weekly survey, 30-year fixed-rate mortgages averaged 4.57 percent this week, and 15-year fixed-rate mortgages came in at 4.06 percent. Bankrate reported a minor uptick in rates, but the movement was marginal. The tracking company said 30-year rates averaged 4.77 percent, and 15-year rates averaged 4.23 percent.

RealtyTrac released its Midyear 2010 Foreclosure Report Thursday, which shows that 1,654,634 U.S. properties received a foreclosure filing during the first half of this year. That figure means that one in every 78 homes received at least one filing between January and June. RealtyTrac says at this pace, we're on track to exceed 3 million properties with foreclosure filings by the end of the year, and more than 1 million bank repossessions. In the second quarter alone, bank repos hit a new record high.

The combination of a down economy and high levels of housing inventory has put sellers at a disadvantage as home prices have continued to drop throughout the summer. According to a report released Wednesday by Trulia, 24 percent of listings on the market as of July 1, 2010 experienced at least one price reduction, a 9 percent increase from the previous month. The total dollar amount slashed came in at $27.3 billion, and the average discount for price-reduced homes continued to hold steady at 10 percent off of the original listing price.

Mortgage fraud risk has declined by 25 percent since it peaked in the third quarter of 2007, according to CoreLogic. But further analysis by the company reveals that despite the falloff, one in 200 home loans still contain misrepresentations that could result in default. CoreLogic concludes that overall fraud risk within the industry appears to have leveled off in 2009. However, one area of increasing concern is short sales, which grew in volume by more than 300 percent over the previous two years.

Delinquency rates for residential mortgage-backed securities (RMBS) were mixed in June. According to Fitch Ratings, U.S. prime RMBS serious delinquencies rose for the 37th consecutive month. But during the same period, Alt-A RMBS delinquencies declined for the third consecutive month, and subprime late-pays fell for the fourth straight month.

Due to a drop in both purchase and refinance activity, mortgage loan application volume fell 2.9 percent for the week ending July 9, 2010, the Mortgage Bankers Association (MBA) reported Wednesday. According to MBA's Weekly Mortgage Applications Survey, the purchase index dipped 3.1 percent from previous week, hitting the lowest level observed in the survey since December 1996. In addition, MBA said the refiannce index fell 2.9 percent from one week to the next.

After a good beginning in 2010, stress returned to the financial markets in the second quarter. But the credit rating agency DBRS says rising market stress is more manageable this time around for U.S. banks. Banks have bolstered their liquidity through debt issuance, reduced balance sheets, are less reliant on short-term market funding, and they've significantly increased cash holdings. But even with all these positives, DBRS says banks are still finding it difficult to grow loans because they remain cautious about extending credit and loan demand is muted.

The number of foreclosure sales that were cancelled in California hit an all-time record in June, according to a report released Tuesday by the locally based firm ForeclosureRadar. In total, 10,506 foreclosures were called off in California last month before reaching the auction sale phase. ForeclosureRadar characterized activity in the Golden State as ""mixed"" last month, with filings of new foreclosure notices on the rise and foreclosure sales down. That assessment follows two straight months of across-the-board declines.