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the latest s e c on da r y m a r k e t a na ly t ic s Se r v ic i ng Or ig i nat ion SERVICING On Confidence Potential homeowners feeling unsure about building in the current marketplace. W ith the price of a new home barely above year-ago levels, builder confidence fell for the third straight month in April, dropping two points to 42, the lowest level since October, the National Association of Home Builders reported in May. Economists expected the Housing Market Index (HMI), the measure of confidence, to 50 | The M Report improve to 45 from March's reading of 44. It was the second straight month the index fell when economists had expected it to improve. The median price of a new single-family home, according to the Census Bureau and HUD, has fallen for three of the last five months and in January dropped $20,500 (7.9 percent), the steepest month-over-month decline since October 2010. The median price of a new home recovered somewhat in February (the last data reported), increasing $7,200, but was just 2.9 percent of the median price in February 2012, the slowest annual change since prices were down 3.2 percent year-over-year from June 2011 to June 2012. The drop in the overall index was driven by a sharp decline in the gauge of buyer traffic, which fell four points to 30, its lowest level since September. The measure of current sales fell two points to 45, the lowest level since October. The outlook for sales in the next six months improved three points to 53, its highest level since February 2007. While the overall index for March was unchanged from the original report, the future sales and buyer traffic components were each revised downward by one point. The buyer traffic measure has fallen six months in the last three months, losing one-sixth of its value in that period. The drop in the HMI, while surprising economists, has to be a blow to the National Association of Realtors (NAR), which has argued the drop in the inventory of existing single-family homes for sale is due in part to the falloff in construction of new homes.