Market Studies

Independent mortgage bankers are a growing segment and they're poised to take over even more market share as larger institutions trim their mortgage businesses. The five biggest banks were responsible for 53.2 percent of new mortgage activity in the United States in 2012, down from nearly two-thirds in 2010. According to a recent FBR Capital Markets forecast, that share could shrink to 40 percent by 2014.

Consumer sentiment rebounded in November, though Americans haven't yet forgotten the government shutdown that brought confidence down in October. The Index of Consumer Sentiment, a joint measure tracked by the University of Michigan and Thomson Reuters, rose to 75.1 for the final November tally, making up some of the ground lost in October, when it dropped to 73.2. Last year, the index was measured at 82.7.

Home prices are keeping with their trend of slow, but steady, month-to-month improvements. CoreLogic's October Home Price Index (HPI) reveals a 0.2 percent month-month rise in the national home price but a 12.5 percent year-year increase. October marked the 20th straight month of annual price gains, according to CoreLogic, which conceded in its latest report that appreciation was beginning to fall more in line with normal seasonal patterns.

While analysts across the industry are reporting waning price gains as we head toward winter, Clear Capital also points out another interesting and perhaps counterintuitive trend occurring in the housing market. Prior to the recovery, high saturations of distressed sales correlated with falling prices, but today's market reveals a switch, with high levels of distressed sales taking place alongside higher price gains.

To address widespread negative equity, at least 15 cities and counties are considering using eminent domain to seize underwater homes and lower borrowers' mortgage principal balances, according to the Urban Institute. The institute conducted a study to see what commonalities these communities share and found that all 15 suffer from high levels of poverty and unemployment, stagnant incomes, and low housing prices.

Home prices and home sales have been rising over the past few years, pointing to a recovery in the housing market, but some warn that what we are seeing may not be a true recovery but instead a mirage created by investors--a dangerous mirage that could lead to trouble in the years to come. According to multiple industry studies, cash purchases made up about half of all home sales across the nation in September.

After taking a sharp dive in October, consumer confidence continued to decline at a more moderate pace in November, indicating the level of uncertainty that still grips the country. The Conference Board's Consumer Confidence Index dropped two points to 70.4 in the most recent reading. The decline follows a more substantial nine point decrease in October stemming from the partial federal government shutdown.

Having risen for the previous four months, mortgage interest rates stumbled in October, according to data from the Federal Housing Finance Agency (FHFA). Using data on more than 5,700 loans from 33 different lenders, FHFA calculated a composite contract rate of 4.32 percent for loans closed in late October, a decline of 4 basis points from September.

Home price gains decelerated on a monthly basis in September in 19 of the 20 cities tracked by the S&P/Case-Shiller Indices, with Las Vegas and Tampa experiencing the greatest slowdowns. All 20 cities reported annual growth, and 13 fared better than they did in August. Cleveland posted the strongest yearly gain, though it remains the second-worst performing city, beating only New York.

For the first time in more than four years, banks insured by the Federal Deposit Insurance Corporation (FDIC) reported an annual loss, according to the regulator's Quarterly Banking Profile released Tuesday. At $36 million, the net income of FDIC-insured banks in the third quarter is $1.5 million below earnings reported in the third quarter of last year.