Tag Archives: Capital Economics

CoreLogic released its latest market analysis of residential property values Monday. The company's index shows U.S. home prices fell another 1.1 percent between August and September. It marks the second consecutive monthly decline recorded by CoreLogic and signals price depreciation is deepening. The company's previous report documented a 0.4 percent drop between July and August. CoreLogic says home prices are adjusting to correct the supply-demand imbalance, and as a result, declines will continue through the winter.

After falling to a 13-year low during the second quarter, the U.S. homeownership rate posted a highly unexpected rise in the third quarter. Data released by the Census Bureau Wednesday puts the nation's homeownership rate at 66.3 percent. That's up from 65.9 percent at mid-year. With foreclosures forcing homeowners out of their homes and buyers waiting on the sidelines as home values declined, the rate has been heading south for quite some time. In fact, the third-quarter rise is the first in two years.

The monthly home price index from the Federal Housing Finance Agency (FHFA) has recorded its first decline since March. FHFA reported Tuesday that home prices in the U.S. fell 0.1 percent from July to August, and the previously reported 0.8 percent increase recorded for July was revised to reflect no change. Data released the very same day by Standard & Poor's showed a 0.2 percent increase in the Case-Shiller home price index for the same period. Economists say FHFA's index is ""a better barometer.""

Foreigners may get an added bonus when they invest in residential real estate in the United States - a visa. Senators from New York and Utah are proposing a bill that would offer residence visas to foreigners when they spend at least $500,000 in the U.S. residential real estate market. Investors may split their spending between two or more properties, as long as they spend at least $250,000 on one home and $500,000 or more total. Economists say low prices resulting from high levels of foreclosures in some states have served to entice foreign buyers.

Sales of previously owned homes slipped 3 percent between August and September, according to data released by the National Association of Realtors (NAR) Thursday. That follows a jump of nearly 19 percent between July and August. The decline was widely expected as sales activity follows the typical seasonal cycle and heads lower with the mercury in the thermometer. Distressed homes accounted for 30 percent of sales in September. Eighteen percent were foreclosed homes and 12 percent were pre-foreclosure short sales.

Interest rates on home loans offered up a mixed bag of results this week. Freddie Mac says fixed-rate mortgages showed no change or dipped slightly and adjustable-rate mortgages ticked upward. Even with the inconsistencies, rates remain near their record lows. Those lows may drop farther with the Federal Reserve's announcement Wednesday that it's planning a new buying spree of mortgage-backed securities and Treasuries. Leading indicators in the bond market since the Fed's statement suggest mortgage rates will again start falling.

Home price depreciation over the past few years has made housing more undervalued relative to incomes than ever before, yet home sales have continued to decline. Even more striking is that the dampened activity can be largely attributed to a weakening in demand from cash buyers and investors, according to the researchers at Capital Economics. The firm has found that since January, the number of homes purchased by cash buyers and investors has fallen by 26 percent.

Home prices rose 0.8 percent in July, marking the fourth consecutive monthly increase, according to the latest home price index from CoreLogic. Capital Economics responded to CoreLogic's report saying, its analysts ""are wary"" of reading too much into the ""fairly optimistic"" house price report because prices have yet to respond to the recent weakening in consumer demand. Despite the monthly increase, Corelogic says home prices are down 5.2 percent from where they stood a year ago.

Home prices increased 3.6 percent over the second quarter of this year, after having fallen 4.1 percent in the first quarter, according to the latest S&P/Case Shiller index. With the second quarter's data, the national index reading recovered from the double-dip cyclical low hit at the end of the first quarter, but still posted an annual decline of 5.9 percent when compared to the second quarter of 2010. Nationally, home prices are back to their early 2003 levels, according to Standard & Poor's.

The delinquency rate of first-lien residential mortgages increased to 8.44 percent of all loans outstanding as of the end of the second quarter of 2011, the Mortgage Bankers Association (MBA) reported Monday. Although the rate is down 141 basis points from a year earlier, it rose 12 basis points when compared to the first quarter of 2011. The biggest increase came from loans in the earliest stage of delinquency - just one installment, or 30 days past due. Analysts called this the ""most worrying"" aspect of the report.