July 2012

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THE LATEST ANALYTICS applications declined by 1.1 percent, according to a re- cently released report from the Mortgage Bankers Association. Capital Economics credited the decrease to cash buyers who are driving up sales activity but are not dependent on hard-to-secure mortgage financing. The research firm pointed to However, home purchase a survey from the NAR, which suggested that 499,000 of the 570,000 increase in home sales since the low in July 2011 has been driven by cash buyers and investors. When analyzing the state of the recovery based on inventory, Capital Economics said tighter inventory is helping to drive up housing starts, which the National Association of Home Builders reported rose by 2.6 percent in April from the month before in March. As for home prices, releases from Case-Shiller and CoreLogic lead Capital Economics to be upbeat about home prices as well. On a seasonally adjusted basis, Don't Believe All the Downturn Hype? Statistics from Capital Economics reveal that the foundation of the nation's economic recovery remains intact. N released a report stating that in its view, the foundations for a sustain- able recovery are still in place. The employment situation in egative reports on the economy may be shaking up confidence, but Capital Economics make the argument that the recov- ery is not going to be derailed. Home sales and prices have Yet, there are still reasons to the U.S. and issues overseas such as the eurozone crises are all taking a toll on the economy and consumer confidence. 60 | THE M REPORT increased, and mortgage afford- ability continues to be at an all-time high. Freddie Mac recently reported the 15-year fixed rate fell even further below 3 percent while the 30-year slipped to another new low, increasing affordability. lighted activity in home sales and stated that the rise in sales in April suggests a modest recovery in the housing market is still on track. Recently, the National Association of Realtors (NAR) released a report showing home sales rose by 3.4 percent month-over- month in April and rose by 10 percent from a year ago. Capital Economics high- the CoreLogic house price index rose by 0.9 percent month- over-month in April and by 1.1 percent year-over-year. When excluding distressed sales, prices rose by even more at 1.7 percent month-over-month and 1.9 per- cent from a year ago. While the Case-Shiller index declined on a quarterly basis, the 20-city index increased monthly by 0.1 percent in March and the national index rose by 1.1 percent on a seasonally adjusted basis quarter-over-quarter. Capital Economics said the split outcomes may be due to the fact that prices are rising faster in areas outside of large metro areas. However, according to Trulia, asking prices fell flat in May, suggesting "house prices will soon pause for breath," the research firm wrote. Remaining unswayed, Capital Economics stated, "On the other hand, the continued tighten- ing in supply conditions looks consistent with further gains in house prices." SECONDARY MARKET ANALYTICS SERVICING ORIGINATION

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