Bill Daniels

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Paul Nolte, Managing Director at Dearborn Partners, says, despite excess inventory in the housing market, the overall economy will continue healing at very slow pace.

Default notices fell 2.0 percent in October and were 19 percent below year-before levels, according to RealtyTrac’s U.S. Foreclosure Market Report. It was the ninth-straight month they’ve decreased on a year-over-year basis. Total foreclosure activity was down 4.0 percent from the previous month and repossessions were down 9.0 percent. James J. Saccacio, chief executive officer at RealtyTrac, said the declines were probably due to the foreclosure freeze, which may lead to further decreases in November. More here and here.

According to The Mortgage Bankers Association’s Weekly Mortgage Applications Survey, total loan application volume was up 5.8 percent last week, due to increases in both the Purchase and Refinance Index. The Purchase Index was up 5.5 percent, while the Refinance Index rose 6.0 percent from the previous week. Michael Fratantoni, MBA’s vice president of research and economics, said the increases in purchase applications over the last couple of weeks align with better than expected employment reports and data indicating some improvement in the economy’s growth prospects. The average contract interest rate for 30-year fixed-rate mortgages was unchanged from the week before at 4.28 percent. More here and here.

The New York Federal Reserve’s Quarterly Report On Household Debt And Credit finds new foreclosures fell in the third quarter while the number of mortgages that became delinquent rose slightly. About 2.7 percent of current mortgage balances transitioned into delinquency during the third quarter, up from 2.6 percent in the second quarter. The number of individuals with a new foreclosure notice added to their credit report fell 5.5 percent from the second quarter. Also in the report, mortgage originations rose 4.3 percent to $380 billion, 26 percent above their low in the fourth quarter of 2008. More here, here, and here.

From July 2009 to June 2010, first-time buyers accounted for 50 percent of all home sales, up from 47 percent in 2009. The 2010 National Association of Realtors Profile of Home Buyers and Sellers shows a record number of entry-level buyers, largely due to the success of the home buyer tax credit. The survey also found that the typical seller who purchased a home eight years ago experienced a median equity gain of $33,000, a 24 percent increase. Sellers who were in their homes for 11-to-15 years saw a median gain of 40 percent. Vicki Cox Golder, NAR’s president, said despite turmoil in the housing market, most long-term owners saw an increase in the value of their property. 85 percent of buyers said buying a home is a good investment. More here.

The National Association of Realtors’ Pending Home Sales Index dipped 1.8 percent based on signed contracts in September. The drop follows two month of gains and puts the index 24.9 percent below last year’s levels, when first-time buyers were rushing to take advantage of the tax credit before its initial deadline last November. Lawrence Yun, NAR’s chief economist, said the foreclosure moratorium is likely to cause some disruption in sales numbers but he believes there will be a surge of pent-up demand once the banks resolve their issues. More here and here.

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Rick Sharga, senior vice president of RealtyTrac, says uncertainty in the foreclosure market will lead to slower sales this quarter, followed by an accelerated rate of activity in the first quarter of 2011.

According to The Mortgage Bankers Association’s Weekly Applications Survey, applications for purchase loans rose 1.4 percent last week. Despite the gain in purchase demand, the Market Composite Index, which measures total loan application volume, fell 5.0 percent, due to a 6.4 percent drop in the Refinance Index. The average contract interest rate for 30-year fixed-rate mortgages was also up, rising to 4.28 percent from 4.25 percent the week before. More here.

According to the Census Bureau, the homeownership rate for the third quarter was 66.9 percent, 0.7 percentage points lower than the year before and approximately the same as it was in the second quarter of 2010. The homeownership rate hit a peak of 69 percent in 2004, at the height of the housing boom. It is now at its lowest level since 1999, when it was 66.7 percent. The national vacancy rate was also unchanged, remaining at 2.5 percent. More here and here.

ZipRealty’s 3rd Quarter Home Hunter Report tracked data from 5,400 cities within 33 markets to identify which ZIP codes had an average sale price most above the average list price and most below the average list price. According to the report, homes in the hottest ZIP codes were selling about 5 percent above asking price. ZipRealty’s John Oldham said it was an encouraging sign that prices may be stabilizing and buyers and sellers were adjusting to the new market reality. The country’s hottest ZIP code was the Greater Grand Crossing neighborhood in Chicago, where homes were selling an average of 9 percent higher than asking price. More here and here.