Market Studies

A recent study by Barclays Capital says that U.S. lenders are holding fewer foreclosed homes than previously assessed by the firm. Some are viewing the revised estimate as a testament to the stability that is taking hold in the housing market, but Barclays warns that the industry should expect REO inventories to grow - albeit gradually - over the next couple of years, as banks push more properties through the pipeline and foreclosure alternatives are exhausted. Barclays estimates that as of the end of February, 480,000 repossessed homes were held by U.S. lenders, mortgage investors, and the GSEs.

After holding steady for two weeks straight, mortgage rates fell to their lowest level in a month and a half this week, both Bankrate and Freddie Mac reported Thursday. Bankrate's market analysis shows that the average rate on a 30-year fixed mortgage has dropped to 5.12 percent. A separate study by Freddie Mac puts the 30-year rate at a flat 5 percent. Rates on 15-year mortgages and adjustable-rate mortgages (ARMs) also headed lower.

Home prices across the United States continue to slide in the quarterly context, but industry data released Thursday indicates that when you widen the scope, year-over-year numbers are still showing a healthy bounce-back from the depressed levels recorded in 2009. Add to that the fact that REOs are coming to market at a much slower pace, and analysts at Clear Capital say it just might mean the rapid deterioration in the housing market will have a shorter lifespan than originally feared.

The housing market in Connecticut seems to be on the road to recovery. According to a report released Tuesday by the Warren Group, a Boston-based provider of real estate data in New England, sales of single-family homes and condos in Connecticut soared by double-digits in March. On a year-over-year basis, single-family home sales jumped 37 percent, and statewide condo sales surged 34.4 percent.

Banks have yet to loosen their tight grip on credit. The Federal Reserve's latest survey of senior loan officers found that most banks maintained stringent lending standards in the first quarter, while some tightened lending terms further. Compared with the previous quarter, a larger percentage of banks indicated that demand for first lien mortgages and home equity loans had weakened further. On the commercial side, a significant portion of lenders said they have increased their use of extensions for loans at or near maturity.

With vacancy rates in the office market at record-high levels, it would seem that the options for tenants are endless. But that might not be the case. According to Grubb & Ellis, a real estate services and investment firm based in Santa Ana, California, the amount of available space in the U.S. office market may be overstated, giving tenants fewer realistic alternatives than previously indicated. In a phenomenon dubbed ""zombie buildings"" by Grubb & Ellis researchers, there are many properties that have significant capital constraints and are therefore unable to fund market-level tenant improvement allowances and commissions.

Bolstered by purchase applications in the days leading up to the expiration of the homebuyer tax credit, total mortgage application volume increased 4 percent for the week ending April 30, 2010, the Mortgage Bankers Association (MBA) reported Wednesday. According to MBA's Weekly Mortgage Application Survey, the seasonally-adjusted purchase index surged 13 percent from the week prior, marking the third consecutive weekly increase in purchase applications and the highest purchase index recorded in the survey since the week ending October 2, 2009.

Residential mortgage originations by U.S. lenders in the first quarter of 2010 retreated 19 percent compared to the same period a year ago, according to industry data released Wednesday. It was the third consecutive quarterly decline in residential mortgage production. With the fall off in origination numbers, the data also revealed that two top-10 originators were unseated in the mortgage lender rankings - MetLife Inc. and Flagstar Bank.

In an effort to provide greater insight into the health of the U.S. economy, Standard & Poor's and Experian have teamed up to create a series of consumer credit default indices that will seek to measure the balance-weighted proportion of consumer credit accounts that go into default for the first time each month.

The Miami metro area housing market is heating up. According to a report recently released by MDA DataQuick, a San Diego-based provider of property data, 6,658 new and resale houses and condos closed escrow in March in the metro area encompassing Miami-Dade, Palm Beach, and Broward counties. This was the highest number of total escrow closings for March since 2007. As a result, total home sales were up 43.3 percent from February and were 43.1 percent higher than March 2009.