Article Archive for December 2012
By Mark Lieberman, Five Star Institute Economist | 12/28/2012
Negotiators in Washington face a dismal weekend leading up to -- and perhaps including -- New Year's Eve, made worse because they're trying to solve the wrong problem. They're wrangling over how to avoid the fiscal cliff when a series of laws aimed at or contributing to the nation's deficit are set to expire, complicated by Treasury Secretary Timothy Geithner's pronouncement the nation is approaching its debt ceiling.
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By Mark Lieberman, Five Star Institute Economist | 12/28/2012
The Pending Home Sales Index (PHSI) increased for the third straight month in November, improving 1.7 percent to 106.4, the National Association of Realtors reported Friday. Economists had expected a slightly fast, 1.8 percent increase to 106.7.
The index, the NAR said, is at its highest level since April 2010.
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By Mark Lieberman, Five Star Institute Economist | 12/27/2012
New home sales jumped 4.4 percent in November to 377,000, the highest level since April 2010, the Census Bureau and Department of Housing and Urban Development reported Thursday. Economists surveyed by Bloomberg expected the report to show a sales pace of 375,000.
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By Mark Lieberman, Five Star Institute Economist | 12/27/2012
First time claims for unemployment insurance dropped 12,000 to 350,000 for the week ended December 22, the third lowest level of the year, the Labor Department reported Thursday. Economists expected claims to increase to 365,000.
The previous week’s report was revised upward to 362,000 from the originally reported 361,000.
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By Mark Lieberman, Five Star Institute Economist | 12/26/2012
Home prices fell in October for the first time since March, according to the monthly Case-Shiller Home Price Index. Both the 10-city index and the 20-city index decreased 0.1 percent from September to 158.77 and 146.08 respectively. The value of the 10 city index fell 0.10 and of the 20-city index dropped 0.09. The 10-city index for October was 3.4 percent higher than it was in October 2011 and the 20-city index showed a 4.3 percent year-year gain.
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By Mark Lieberman, Five Star Institute Economist | 12/21/2012
Economic indicators are never clear and are not isolated bits of data. The numbers released in the last week provided another example of that maxim.
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By Tory Barringer | 12/21/2012
As Washington engages in a standoff over budgetary proposals to avert the fiscal cliff, several industry professionals and associations are calling upon lawmakers to avoid slaughtering what was once thought to be a sacred cow: the mortgage interest tax deduction (MID). While many housing professionals view the deduction as a break for homeowners and an incentive for others to purchase their own homes, critics call the MID a "subsidization of the real estate industry." Now that the MID is on the bargaining table, a number of people are speaking up in defense of it.
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By Esther Cho | 12/21/2012
Tailwinds should continue for specialty servicers in 2013, according to a report from FBR. As large, traditional servicers become unwilling to service certain asset that require more attention, FBR says it believes about $600 billion to $700 billion in "high-touch, credit sensitive assets" will eventually make their way into the specialty servicing and sub-servicing sectors.
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By Krista Franks Brock | 12/21/2012
Both the residential mortgage market and the commercial mortgage-backed securities (CMBS) market are expected to see continued strengthening in the New Year, according to two reports from Fitch Ratings. The ratings agency, however, expressed concern for both markets if the fiscal cliff is not addressed.
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By Guest Contributor: Daren Blomquist | 12/21/2012
Some level of certainty and stability returned to the U.S. housing market in 2012, providing a solid foundation for the market to build on in 2013. But there are still significant risks that threaten this hard-won stability and could trip up some local markets trying to make the tricky transition from stability to strength. RealtyTrac expects 2013 to be bookended by two discrete increases in foreclosure activity: a jump in bank repossessions (REOs) near the beginning of the year and a jump in foreclosure starts near the end of the year.
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By Esther Cho | 12/21/2012
The housing market remains under pressure in the near term, with shadow inventory, in particular, posing a risk to the housing recovery, according to a report from DBRS. According to estimates, the report revealed about 2.3 million homes still remain in the shadows as of July 2012, and another 2.5 million homes are in existing and new home inventory, or visible inventory. "Once unleashed, the number of shadow properties will undoubtedly boost supply and distress the local markets that were just beginning to recuperate," the report stated.
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By Krista Franks Brock | 12/21/2012
Keefe, Bruyette & Woods (KBW) a boutique investment bank and broker-dealer, recently released its predictions for the mortgage market for the year 2013, entitled Watching Grass Grow: Mortgage Reform in 2013. As the title implies, KBW does not expect major changes in the New Year. However the investment bank does expect some "modest changes in the mortgage landscape driven by the Federal Housing Finance Agency (FHFA)."
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By Mark Lieberman, Five Star Institute Economist | 12/21/2012
No matter how foggy the haze is, economists typically dust off their crystal balls in December. However economic forecasts too often involve driving by looking in a rear-view mirror.
Anticipating what might happen in the housing markets, with so many moving parts involved, can be the trickiest of all forecasts. Because housing is a unique expenditure--combining elements of investment and a service--it depends on a variety of elements: employment, income, interest rates, the regulatory environment, and even the weather.
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By Esther Cho | 12/21/2012
TransUnion forecasts a decline in mortgage delinquency rates for 2013, but the rate is expected to stay above 5 percent.
The credit bureau expects the mortgage delinquency rate to drop to 5.06 percent by the end of 2013 from an estimated 5.32 percent at the end of this year. At its peak, the mortgage delinquency rate reached 6.89 percent in the fourth quarter of 2009. If the rate does drop to 5.06 in 2013 as TransUnion predicts, the decrease would only be a 27 decline from the peak and still remain above normal levels, which the credit bureau says ranges from 1.5 to 2 percent.
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By Esther Cho | 12/21/2012
After five years of cumulative losses, home values will finally post their first annual gain, according to data from Zillow. The calculations show homes are expected to gain $1.3 trillion in cumulative value for 2012, the largest gain since 2005 and the first annual increase since 2006, Zillow reported. In 2006, homes increased their value by $483 billion, but then declined from 2007 to 2011, with the largest drop in 2008, when homes lost more than $3.2 trillion in value, according to Zillow.
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By Esther Cho | 12/21/2012
In the third quarter of this year, the overall percentage of mortgages that managed to stay current improved from last year, but declined slightly quarter-over-quarter, according to a report from the Office of the Comptroller of the Currency (OCC). The report also found foreclosure activity "remains elevated," but fewer properties entered the foreclosure process. In Q3, more home retention actions were also applied compared with home forfeiture actions (foreclosure sales, short sales, and deeds-in-lieu).
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By Esther Cho | 12/21/2012
After tracking home price trends in 25 metropolitan statistical areas (MSAs), Radar Logic found prices in October are now 6.9 percent higher than a year ago, according to the company's RPX Composite price. "However, this increase was driven by a change in the composition of sales rather than price appreciation," Radar Logic stated in a recent report. Upon closer scrutiny, the analytics company explained the price increase is mainly the result of a decrease in distressed sales, or "motivated sales," and the actual price increase for "non-motivated sales" is much smaller than the overall yearly gain.
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By Krista Franks Brock | 12/21/2012
Sixty-five percent of real estate professionals say home values will increase over the next six months, according to HomeGain's fourth-quarter survey. The third-quarter survey found 51 percent of professionals shared this optimistic view. Optimism is not as high among homeowners, 39 percent of whom say home values will rise over the next six months. This is up from 34 percent in the previous quarter. The outlook for the next two years is even more optimistic than the outlook for the next six months – both from real estate professionals and from homeowners.
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By Esther Cho | 12/21/2012
Lender Processing Services, Inc. (LPS) offered an early look into delinquency and foreclosure trends for November. The data provider found the delinquency rate increased slightly to 7.12 percent from 7.03 percent in October, representing a 1.2 percent increase. Compared to November 2011, the delinquency rate has fallen by 9.06 percent. The foreclosure pre-sale inventory rate decreased to 3.51 percent, with inventory falling monthly and yearly by 2.84 percent and 16.42 percent, respectively.
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By Mark Lieberman, Five Star Institute Economist | 12/21/2012
Personal income jumped 0.6 percent in November--twice what economists forecast--improving $85.8 billion, while spending rose a hefty 0.4 percent, the Bureau of Economic Analysis. The growth in spending matched economists’ forecasts.
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