Market Studies

Home prices in the United States increased again in May, marking the fourth consecutive month to post a year-over-year gain, according to the latest CoreLogic index. The company reported that national home prices, including distressed sales, increased by 2.9 percent in May 2010 compared to May 2009. On a month-over-month basis, the May index was 0.9 percent higher than April. In terms of the highest appreciation in home values, California fares the best among the states, while Idaho takes the title for the greatest depreciation.

During the first half of 2010, the number of mortgage-related firms to close or fail jumped by more than a quarter from the same time last year, according to industry data released this week. The increase was driven by financial institution failures as the number of non-bank lenders to close has dwindled. The period between January 1 and June 30 of this year saw 109 mortgage-related failures and closings. The figure represents a 27 percent increase from the 86 closings reported during the first half of 2009.

Based on new data released by Fitch Ratings, $512 million of loans held by investors in commercial mortgage-backed securities (CMBS) were added to the past-due bucket last month. The net increase pushed the U.S CMBS delinquency rate to 8.14 percent. While it's the first time Fitch has reported delinquencies beyond the 8 percent mark, June's 17 basis point rise was the smallest increase in 11 months, thanks to loan resolutions on $1.5 billion during the one-month period. However, the ratings agency says this trend isn't likely to continue.

A new study released Monday by Bankrate, Inc. shows that, even with home prices sliding and mortgage rates now the lowest they've been in decades, the vast majority of Americans are content with their home purchases. Ninety percent of those polled said they do not have any regrets about buying their current home. Among those who do regret the purchase, the most common reasons cited were because they cannot sell their home under current market conditions, or they can't afford their monthly mortgage payments.

According to a recent report by DebtX, the aggregate value of DebtX-priced commercial real estate (CRE) loans that collateralize commercial mortgage-backed securities inched up to 76.6 percent as of May 28, 2010, rising slightly from 76.4 percent in April. Despite the month-to-month increase, loan prices were still down on a year-over-year basis, as CRE loan values were 77.6 percent in May of last year.

According to an article recently released by the Federal Reserve Bank of Cleveland, much can be gleamed by studying the historic link between foreclosure and unemployment rates--including the fact that according to past patterns, we can expect the current high foreclosure rate to persist for some time. This finding was based on the observation that states that experienced boom-bust housing cycles in the past (such as Texas, Oklahoma, Massachusetts, and California) had elevated foreclosure starts for years after the peak in foreclosure starts and inventory, and these previous boom-bust cycles were small in comparison to the current cycle.

Housing-related loan delinquencies improved across the board in the first quarter of 2010, the American Bankers Association (ABA) recently reported. According to ABA's quarterly consumer delinquency report, home equity delinquencies fell for the first time in two years to 4.12 percent of all accounts, down from 4.32 percent the previous quarter. Home equity lines of credit delinquencies and property improvement loan delinquencies also fell during the same period.

The average guarantee fee charged by Fannie Mae and Freddie Mac on single-family mortgages fell to 22 basis points in 2009, a dip from 25 basis points in 2008, according to a report released by the Federal Housing Finance Agency (FHFA). FHFA said this decline resulted from a significant improvement in the credit profile of the single-family mortgages the government-sponsored enterprises acquired relative to 2008. On a year-over-year basis, there were improvements across the product, credit score, and loan-to-value ratio spectrums.

Households across the nation have been negatively impacted by the foreclosure crisis, but African-American and Latino families have been hit the hardest, according to a report recently released by the Center for Responsible Lending (CRL). The report found that while the majority of families who have lost their homes are non-Hispanic and white, African-American and Latino families have been disproportionately affected relative to their share of mortgage originations. Among recent borrowers, CRL estimates that nearly 8 percent of both African-American and Latinos have lost their homes to foreclosure, compared to 4.5 percent of whites.

The weekly mortgage rate reports released Thursday by Freddie Mac and Bankrate were mixed. But one thing was certain: the average rate for 30-year fixed-rate mortgages hit a new record low. Freddie Mac said 30-year fixed-rate mortgages averaged 4.57 percent for the week ending July 8, 2010, down from last week's average of 4.58 percent. And Bankrate said 30-year fixed-rate mortgages fell to 4.74 percent this week, a slight dip from 4.75 percent one week earlier. Meanwhile, the average rate for 15-year fixed-rate mortgages posted a minor uptick.