Although it appears that national property values are approaching their bottom, industry experts from one government agency argue that on a local level, it's a much different story.
The Office of the Comptroller of the Currency says that the presence of foreclosed houses still have a significant impact on local prices, even through inventory levels are slowly thinning around the country, according to a recent report from Reuters.
"It does not appear that we have yet hit bottom in the pricing of housing stock in many regional markets and the issues attendant to resolution of foreclosure processing have delayed market clearing from occurring more quickly," OCC deputy comptroller Martin Pfinsgraff told the news source.
OCC takes aim at foreclosures
However, recent efforts taken in part by the OCC to implement lending regulation, especially in regard to the foreclosure process, could help a number of local marketplaces find stability. In addition, the agency is still a key part of an ongoing investigation examining foreclosure methods used between 2009 and 2010 to see if there were any specific borrowers targeted. Should any wrongdoing be found, these borrowers could be eligible for a certain amount of compensation.
Refinancing on the rise
While the OCC works to correct past issues, the present mortgage industry appears to be doing very well, as borrowers continue to capitalize on affordable mortgage rates. Specifically, the Mortgage Bankers Association recently found that overall home loan activity rose 3.9 percent during the week ending May 18.
While purchase requests actually declined 3 percent from the previous week, this was offset by a surge in refinancing. This share of activity accounted for 76.6 percent of all mortgage requests, up from 74.9 percent a week earlier. A recent decline in loan rates, which experts say was caused by global economic uncertainties, is believed to be responsible for this rise in activity.
Global economy affecting rates
"Continuing negative developments in the sovereign debt crisis in Europe, particularly in Greece and Spain, as well as the recent French elections, which have shifted political power in a manner that will likely show less support for European austerity, helped push the U.S. 10-year Treasury yield below 1.7 percent last week," said MBA vice president of research and economics Michael Fratantoni.
Mortgage records indicate that the rate for a 30-year FRM with a conforming loan balance fell to 3.93 percent, while in contrast, the rate for a 30-year FRM jumbo loan edged higher to 4.25 percent.