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FEATURE Making Sense of Volatile Housing Statistics The mortgage market's ups and Bipolar Boom: The downs are enough to make any lender feel off balance, but if evaluated correctly, today's unpredictable data can become an asset. By Mark Lieberman T he headlines tell the story: » "Case-Shiller Jumps a Record 2.2% in May" » "Housing Gains Foothold as Mortgage Rates Dip" » "Homebuilder Confidence Soars to Five-Year High in July" » "Median Prices for Existing Homes Reach Four-Year High" » "June Housing Starts Rise to Highest Level Since 2008" Or, do they: » "Fed: U.S. Economy Faces Headwinds Far and Near" » "Beige Book Finds 'Modest to Moderate' Progress for Economy" » "U.S. Economy Adds Only 80K Jobs in June" a stuttering economic recovery, housing numbers, with some exceptions, have been stronger in recent reports, leaving observers, economists, and real estate profes- sionals alike scratching their heads. In truth, in spite of of those Despite what appears to be aged 358,000 for the first six months of this year—low by historic standards—they averaged 313,000 for the last six months of 2011 and 301,000 for the first six exceptions, trends are looking up. While new home sales aver- months of 2011. Existing home sales averaged 4.552 million for the first six months of 2012 compared with 4.307 million for the last six months of 2011 and 4.25 million for the first six months of 2011. Reasons for the Resurgence T employment rate remains above 8 percent, personal income growth has stagnated, and job creation has slowed to a crawl. Why? "The summer season always hose improving numbers came even though the un- brings homebuyers out of the woodwork, so we may chalk this up as a seasonal phenom- enon" suggested David Zugheri, president of Houston-based Envoy Mortgage. "Anyone that has been in the business for a decade or two knows that sustainable hous- ing growth is fueled by a robust economy and employment. Right now, we have neither. Another indicator for new home sales could be related to outrageously low interest rates and rising rents. At the end of the day, if it is substantially less expensive THE M REPORT | 31