Market Studies

The National Association of Home Builders (NAHB) took look at the features today's young homebuyers want most and how builders are adapting to those needs. According to the association's 2012 consumer preference survey, more than 80 percent of Generation Y homebuyers (people born in 1977 or later) prefer a highly energy-efficient home over a lower-priced home without energy-efficient features, preferring to save instead on utility costs.

While national home prices continue to post gains, Clear Capital's VP of research and analytics, Alex Villacorta, insists ""granularity in home prices remains key."" At a broad regional level, prices increased the most in the West (2.4 percent) and least in the Midwest, 0.7 percent. The South and Northeast fell in between with gains of 1.1 percent and 0.8 percent, respectively. At the metro level, Las Vegas outpaced Phoenix as the metro with the greatest price gain on a yearly basis. Phoenix held this rank from April 2012 until now.

Home prices climbed higher for the 14th straight month and displayed another impressive double-digit annual gain, according to CoreLogic's Home Price Index (HPI) report. When including distressed sales, prices were up 12.1 percent in April compared to a year ago CoreLogic reported the increase in April marks the biggest annual gain since February 2006. From March to April, home prices ticked up by 3.2 percent.

A report from LendingTree shows down payment percentages continue to decline even as interest rates recover. According to LendingTree's study, average down payments for 30-year fixed-rate purchase mortgages have declined 9.4 percent since May 2011. As of May 31, 2013, the average down payment percentage across the nation was 16.1 percent, while the average national loan amount was $221,694.76. ""As the housing market begins to improve, lenders are beginning to loosen their guidelines to more normalized standards and approve loans with lower down payments,"" said Doug Lebda, CEO of LendingTree.

Shadow inventory held by the GSEs and HUD "vastly" outnumbers REO properties the groups maintain, according to a joint report from the Office of Inspector General for the Federal Housing Finance Agency and HUD. The report further warned HUD and the GSEs must pay close attention to shadow inventory, which threatens to increase their supply of REOs. For the GSEs, the ratio of shadow inventory to REO inventory was about 6-to-1, while shadow inventory for HUD was 19.9 times greater than REO inventory.

Despite improvements in home values, Radar Logic continues to contend the factors underpinning the recovery will not lead to sustainable price gains. In March, Radar Logic's home price index, which tracks 25 metro areas, showed a 13.1 percent year-over-year gain. Even with the double-digit gain, the data and analytics firm touched on several points to explain why the trend won't last, with the main one being the temporary issue of limited supply. Demand is also not expected to last since it is driven by low mortgage rates and institutional investors.

According to BEA, profits fell for both financial and non-financial corporations in the first quarter. For financial corporations, it was the fourth quarterly decline in profits in the last five quarters. The slip in financial corporation profits comes at a particularly critical time for the financial sector, as housing-so heavily dependent on lending institutions--is in the midst of a nascent recovery, and that recovery is causing concerns that we may be on the cusp of yet a new housing bubble. Recent data shows home prices rising at the fastest pace since the housing bubble burst.

While reverse mortgages can be a boon to seniors as they head into retirement, a new report from the National Center for Policy Analysis (NCPA) says recent trends show trouble in the market that may cost taxpayers billions of dollars. According to a 2012 MetLife survey, two-thirds of borrowers are now using reverse mortgages to pay down debt. Pamela Villarreal, a senior fellow at NCPA, expects the ""troubling trend will increase as more baby boomers enter retirement with mortgage debt than previous generations.""

Over 4.2 million single-family residential properties across 19 states are at risk of encountering hurricane-driven storm surge damage, according to CoreLogic's latest storm surge report. In a worst-case scenario situation, CoreLogic's analysis also found risk for property damage is valued at $1.1 trillion. Out of the over 4 million properties at risk, CoreLogic reported more than 976,000 of the homes are in an ""extreme risk"" zone, meaning they are at risk for damage from a hurricane of any category.

In some markets, the recent home price gains may actually be too rapid, leading to concerns of a market imbalance that could eventually stall or reverse the positive trend, according to an analysis from Fitch Ratings. While the unemployment rate is trending down and low mortgage rates are helping with affordability, certain areas are seeing prices accelerate far beyond job growth and incomes. This particular problem has been especially notable in markets that have not fully recovered from the previous bubble, which includes several cities in California, the agency found.