Some of the country's biggest mortgage lenders have now reached an agreement with the Department of Housing and Urban Development to give local nonprofit organizations the ability to purchase foreclosed homes before investors have an opportunity to bid on them.

The nonprofits have been operating under HUD's Neighborhood Stabilization Program, which purchases and renovates foreclosures to turn them into affordable housing opportunities.

"This groundbreaking agreement will help rebuild neighborhoods that have been struggling with blight and declining home values due to foreclosures," said HUD Secretary Shaun Donovan. "This agreement helps us level the playing field to give communities a better chance to stabilize these neighborhoods."

Officials said that on many occasions, the organizations ended up competing with outside investors, which affected their ability to accomplish their goals. Under the new National First Look Program, nonprofits will have two days to show interest in a property, and then 12 more to work out a deal to buy it.

HUD did not name which nonprofit agencies would be participating in the program. The local NSP is currently run through the Harris County Community Services Department. As of this past May, the organization had purchased roughly 70 Houston foreclosures.

As the nation's housing economy continues to struggle, one of the biggest effects has been seen in the construction industry, which has been forced to cut thousands of jobs in the Houston area.

According to statistics from the Associated General Contractors of America, construction employment over the last year decreased in 276 out of 337 major cities nationwide. Houston suffered one of the biggest losses in terms of total jobs, with the local industry shedding 14,700 jobs, or 8 percent of workers, as the construction of Houston homes fell with the expiration of the homebuyer tax credit.

"As much as we would hate to see how much worse the construction employment figures would be without the stimulus, the fact is our industry is continuing to suffer even as some areas of the economy have begun to expand," said Stephen Sandherr, the association’s chief executive officer.

Other cities which saw significant job losses in construction included Chicago, Las Vegas and Los Angeles, although Chicago's numbers were skewed by a recent strike.

Statistics from the Commerce Department do not paint a rosier picture. Figures released Tuesday showed that construction spending had fallen 1 percent compared to June, and had reached its lowest point in a decade. In addition, last month, officials said that new home sales in July had fallen 12 percent.

Record-low interest rates are continuing to fuel increased numbers of consumers looking to refinance their mortgages, and purchase activity also showed slight growth for the second consecutive week.

According to the Mortgage Bankers Association, on a seasonally-adjusted basis, the volume of total loan applications increased 2.7 percent compared with last week, as the refinance index grew by 2.8 percent and the purchase index increased by 1.8 percent. But on an unadjusted basis, the purchase index showed a 0.4 percent drop compared to the previous week, and is now 37 percent lower than last year.

"Despite the slight increase in purchase activity in the past week, the continued low level of purchase applications indicates we are unlikely to see an increase in new home sales reported for August or existing home sales reported for September," said Michael Fratantoni, the MBA's vice president of research and economics.

Refinancing activity continued to dominate the mortgage market, making up 82.9 percent of all applications. That number is an increase from a mark of 82.4 percent last week and is the highest ratio since January of 2009.

The increase in purchase applications could help reduce the amount of distressed Houston properties. Experts told the Fort Bend Sun that of the 5,500 homes listed in the Houston MLS, approximately one in 10 are either available as foreclosures or short sales.

The number of Houston homes currently in foreclosure may be falling, but future signs point toward a continued trend of distressed properties.

According to the Mortgage Bankers Association, just 0.7 percent of home loans in the state went into foreclosure in the second quarter of the year, a slight improvement compared to last quarter. But at the same time, the number of homeowners with late mortgage payments - a precursor to future issues - increased by more than half of a percent to 9.28 percent to the highest rate since the end of last year.

W. Scott Norman, president of the Texas Mortgage Bankers Association, said he was disappointed with the regression of delinquency rates considering that the state added jobs over the same period, but said that the decrease in foreclosures was encouraging.

The situation in Texas showed better results than the national statistics, but followed a similar trend. Nationwide, just 1.11 percent of mortgages holders went into foreclosures last quarter - the first drop since 2006 - but the number of homeowners who fell behind on their payments increased almost a quarter of a percent.

There are a number of things to consider when purchasing a home. But one thing that home buyers in Texas need to be especially aware of is the issue of reconveyance and transfer fees.

The fee is created by adding a special rider to the title of the home, which requires anyone who buys the home to pay 1 percent of the sales prices to the beneficiary - generally the home's original builder. Because the fees can last up to 99 years, the fees can raise significant amounts of money for home builders. But many say that they can seem unfair to any later owners of the property.

"Say the new owner gives a big boost to the value of a home by upgrading the bathrooms and doing a big addition," Vanderbilt Law School Professor Kelly Lise Murray told Forbes. "They'd be obliged to share that appreciation, via the reconveyance, with people who didn't contribute at all."

Fifteen states have enacted laws banning the fees, and the National Association of Realtors - which opposes the fee - says that many other states have considered taking similar steps in the near future. In addition, earlier this month, the Federal Housing Finance Agency proposed a rule that would prevent Fannie Mae or Freddie Mac from taking on loans for properties which contain the clause.

A new report says that Texas residents are dealing with increasing levels of financial distress.

According to a nationwide study by CredAbility, Texas earned a score of 65.89, slightly better than the national average of 65.23. Anything below 70 is viewed as financially distressed, while scores lower than 60 signal that consumers are in "crisis." The score marks the second consecutive quarter of improvement for consumers in the state, who has seen three consecutive declines before last quarter's result.

"The modest improvements we see in housing and net worth show incremental, but positive signs of stabilization. But to use a medical analogy, the patient is still in critical condition. Until housing and employment markets improve significantly, we cannot expect to see significant recovery in these numbers," said Mark Cole, CredAbility's chief operating officer and executive responsible for the CredAbility Consumer Distress Index.

Texas scored above 70 in terms of credit and household budgets, but also continued to show distress specifically in regards to employment, net worth and housing - showing that buyers and sellers of Houston homes are not out of the woods.

Overall, the state's home prices have continued to grow. A recent report from the Federal Housing Finance Agency found that home prices in Texas have risen 1.43 percent over the past year.

The latest report by the National Association of Realtors says that while the commercial real estate market is beginning to show signs of stabilizing, it is still tilted towards the tenant.

The Society of Industrial and Office Realtors said that its index of the market rose 2.8 points to 41.0 in the year's second quarter. But that mark still fell well short of the score of 100 that stands for a balanced marketplace.

"Vacancy rates are beginning to level off in some sectors, but rent discounts and moderate levels of landlord concessions are widespread," said Lawrence Yun, the NAR's chief economist. "This is very much a tenant's market, which is quite favorable for businesses that are considering expansion. It's also encouraging that there is a modest improvement in the sentiment of commercial real estate practitioners."

Surveyed about their opinion on the market's potential for the future, 57 percent of respondents said that they expected improvement in the third quarter of the year.

The market for Houston properties has actually been one of the strongest in the country. According to a study by Keefe, Bruyette and Woods, Houston ranked in the top seven in five of the six commercial real estate categories, HousingWire reports.

As he announced a pair of new government programs aimed at stemming foreclosures, Secretary of Housing and Urban Development Shaun Donovan said that the Obama administration remains open to the idea of reviving the first-time homebuyer credit, after its expiration fueled a massive drop in Houston home sales.

Saying that the decline in existing home sales last month was "worse than we expected," Donovan said that while it was too early to consider bringing back the tax credit, it was on the government's radar.

"All I can tell you is that we are watching very carefully," Donovan said on CNN's "State of the Union" program. "We're going to be focused like a laser on where the housing market is moving going forward, and we are going to go everywhere we can to make sure this market stabilizes and recovers."

Donovan also announced a new home Federal Housing Administration refinancing program for struggling homeowners, and an emergency homeowners' loan program to prevent foreclosures.

According to figures from the Houston Association of Realtors, the sales of Houston properties dropped 25 percent last month compared with July of last year following the expiration of the tax credit.

A new study on education systems in cities across the country says Houston has one of the most innovative programs in the nation.

According to the Fordham Institute, which ranked 30 U.S. cities for having a healthy environment for school reform, Houston was one of nine cities which received a 'B' grade. No city received an 'A'.

"Too few American cities have the talent pool, leadership, infrastructure, culture and resources to serve as hotbeds of educational problem solving," said Frederick M. Hess, director of education studies at the American Enterprise Institute. "But a handful of locales stand out as bright spots; they have created dynamic environments that help to attract and nurture creative problem solvers."

Because home prices are often tied into school performance, the report could give the value of Houston homes a needed boost.

Part of the improvement in local school performance is tied to how the city adjusted to the influx of Hurricane Katrina refugees five years ago. A report from the Texas Education Agency earlier this year found that students from New Orleans had quickly closed the education gap that existed when they first moved to the city.

It's not unusual to hear of homeowners who stop paying their mortgages for properties that aren't worth as much as their loans. But now, as the Wall Street Journal reports, many commercial property owners are also strategically defaulting on their properties.

According to the WSJ, a number of major developers, such as Vornado Realty Trust and the Simon Property Group - which owns a number of Houston properties including the Houston Galleria - have stopped making payments to lenders who won't agree to restructure their underwater loans. A number of them have gone so far as to mail their lenders the physical keys to the property - a practice the paper says has been dubbed "jingle mail."

The WSJ reports that the practice may become even more common in the coming months. A study by Trepp found that 52 percent of commercial real estate properties with mortgages are underwater.

A significant portion of all foreclosures by homeowners are also strategic - meaning that the borrower could have paid it, but deliberately chose not to. A report earlier this year by Morgan Stanley said that percentage was 12 percent - three times the normal level.

A new study shows that a number of local homeowners are dealing with underwater mortgages.

Statistics from the data provider CoreLogic show that 12 percent of Houston homes - more than 111,000 properties, are worth less than their homeowner's mortgage. In addition, another 5.9 percent of properties were classified as "near equity," meaning they could be in danger of going underwater.

"With nearly 5 million borrowers currently in severe negative equity, defaults will remain at a high level for an extended period of time," said Mark Fleming, chief economist with CoreLogic.

The study showed that Houston is actually faring worse than the state as a whole. Across Texas, approximately 11.3 percent of homes are underwater, and another 6 percent are close.

Despite having a higher rate of underwater mortgages than the rest of the state, the Houston real estate market is still well below the national rate. Nationwide, roughly 23 percent of mortgages are upside down, which actually represents a 1 percent drop compared with last quarter, mostly due to foreclosures.

Continually dropping rates are making a mortgage even more attractive for those looking at Houston homes for sale.

According to the latest data from Freddie Mac, interest rates on a 30-year fixed-rate loan dropped for the ninth time in the last 10 weeks, and have now reached a new all-time low of 4.36 percent. One year ago, rates for a similar loan averaged 5.14 percent. 15-year loans also posted a new low at 3.86 percent.

But despite the fact that the low rates have failed to drive an increase in sales, researchers saw optimistic signs for the real estate market.

"House prices still appear to be stabilizing. Nationally, house prices rose 0.9 percent on a seasonally-adjusted basis during the second quarter of this year this year after 11 consecutive quarterly declines, according to the Federal Housing Finance Agency's purchase only index. Eight of the nine census regions experienced positive gains, compared to none in the first quarter," said Amy Crews Cutts, deputy chief economist at Freddie Mac.

The analysis closely mirrors a report earlier this month from the Houston Association of Realtors, which found that while sales dropped precipitously, the average selling prices of an average Houston home actually reached a new two-year high.

New research has shown that the development of wind and solar energy in the state could give a needed boost to the economy.

The report, a six-month project of former state official Billy Hamilton, estimates that the clean energy sector could create anywhere from 37,000 to 190,000 new high-paying jobs statewide, and bring in more than $2 billion in combined tax revenues over the next 10 years. That job growth would help grow the overall economy, and help stabilize the state's home sales.

"As a state, we can do three things: we can do nothing, we can grow a little or we can grow a lot in the renewable energy business," Hamilton said at a press conference at Texas Tech University. "However, we are competing with other states and nations in realizing the potential." He added that renewable energy worldwide was a $200 billion industry.

The clean energy sector has enormous job creation potential. A study by the Pew Charitable Trusts found that the number of clean energy jobs grew 250 percent faster than overall job creation from 1998 through 2007.

Those trying to sell Houston real estate may want to pay attention. A new study shows that while you can lower your asking price later on, the first few days of a listing generate the most interest.

The Washington-based brokerage Redfin analyzed home listings from several major real estate markets, which sat in the market for at least two months, and had been updated at least once. The results, according to the Wall Street Journal, showed that online home listings generated almost four times as much interest as they did a month later.

In addition, the study found that updated listings, on average, drew far less attention that the initial listings themselves - showing that dropping the price a month down the line won't draw in as many people as a stronger initial listing.

Redfin's chief executive, Glenn Kelman, told the paper that he felt the trend showed that home listings had become "just another momentary media phenomenon in an ADD-addled world.”

Home sellers are also fighting an uphill battle at the moment. Recent figures from the National Association of Realtors showed that home sales dropped 27 percent in last month after the expiration of the first-time homebuyer tax credit.

While home prices nationwide are decreasing, the price of Houston homes is growing.

Newly-released data from the Federal Housing Finance Agency - which measures the sales of homes which have mortgages through Fannie Mae and Freddie Mac - shows that home prices nationwide fell 1.6 percent over the past quarter, following a 3.2 percent decline in the first three months of the year.

But home values in Texas ran counter to the overall trend, and were one of just 10 states, including Washington, D.C., which showed an increase in home values over the past year. Home prices in the state rose a total of 1.43 percent over the past 12 months - the third-highest rate in the nation. Home prices have grown 1.02 percent in just the last three months.

Idaho showed the biggest decline in home values over the past year, with property values dropping nearly 11 percent.

Analysts blamed the nationwide drop in home values on the number of foreclosures entering the market. A report earlier this year by RealtyTrac found that the number of foreclosures will probably top 1 million before the end of the year.