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Market Studies

FHFA’s Home Price Index Records Annual Gain of 7.4%

The Federal Housing Finance Agency (FHFA) reported a 0.7 percent increase in its House Price Index (HPI) from March to April. Year-over-year, the HPI was up 7.4 percent. The latest increase marks the 15th straight monthly price improvement in the purchase-only, seasonally adjusted index.

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Delinquency, Foreclosure Rates Decrease to Post-Crisis Lows in May

The national delinquency rate and foreclosure inventory rate each fell to post-crisis lows in May, Lender Processing Services reported Tuesday. At 6.08 percent, the national delinquency rate in May stood at the lowest level since May 2008, when the rate was 5.96 percent. At the same time, the foreclosure inventory rate slipped to 3.05 percent, which represents the lowest point since March 2009 when the rate was 2.90 percent. Over the last year, foreclosure inventory has plunged 27 percent and also fell by 3.9 percent over the last month.

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New Home Sales Up, Price Slips in May

The price of a new single-family home dropped 3.2 percent in May, but sales increased 2.1 percent to 476,000, the highest level in almost five years, the Census Bureau and HUD reported Tuesday. Economists surveyed by Bloomberg expected April sales to increase to 460,000 from April's originally reported 454,000. April sales were revised to 466,000.

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Case-Shiller Indices Post Record Monthly Gains

Home prices posted their strongest monthly gain on record in April, increasing more than 2.5 percent, according to the Case-Shiller Home Price Indices released Tuesday. The monthly 20-city index rose 2.5 percent in April, while the companion 10-city index increased 2.6 percent. Year-over-year, the 20-city index was up 12.1 percent, and the 10-city index was up 11.6 percent, each being the strongest yearly gain since March 2006.

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Price Gains to Slow But Recovery Will Continue

With strong price gains continuing to make headlines, industry analysts are quick to assure us we are not in the midst of another bubble. The current pace of price appreciation will not endure much longer, they say. CoreLogic, Zillow, and other industry observers concur prices appreciation is set to slow, and Monday's report from Capital Economics reinforces this prediction. What is unique about Capital Economics' viewpoint is the firm anticipates ""a more marked slowdown in the pace of house price gains over the next year than other commentators.""

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Labor Shortage in Homebuilding Could Dampen Recovery

Fitch has added its voice to the chorus of those concerned about homebuilding industry's labor shortage and the effects it may have on new housing growth. The ratings agency noted that while a deficit in workers may not lead to ""disastrous national numbers for housing,"" it--combined with a lack of available lots and overly tight mortgage qualification standards--may put a damper on the recovery.

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Investor Activity Falls Sharply in May

As prices rise, investors are having a harder time justifying housing market purchases, according to a recent Campbell/Inside Mortgage Finance HousingPulse Tracking survey. In May, the share of home purchases from investors fell to the lowest level in more than three years, dropping to 20.2 percent from 22 percent in April, according to the survey.

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Survey: 27% of Americans Have No Emergency Savings

If an emergency situation were to occur, more than a quarter of Americans said they have no extra savings to cover expenses, according to a recent Bankrate survey conducted by Princeton Survey Research Associates International. In the survey, 27 percent of Americans reported having no emergency savings in their checking, savings, or money market accounts, while 23 percent held less than three months of savings to cover expenses, which means half have less than three months of funds to cover expenses.

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LPS Reports Strong National, State-Level Home Price Gains in April

National home prices, along with the 20 largest states, posted positive monthly and yearly gains in April, according to Lender Processing Services (LPS). LPS' Home Price Index (HPI) found prices in April stood at $217,000, up by 1.5 percent from March and up 8.1 percent from a year ago. The national HPI is still 18.2 percent below its June 2006 peak, when the index averaged $265,000. For the second straight month, all 20 of the largest states tracked by LPS saw positive month-over-month growth.

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Commentary: We’re Forever Seeing Bubbles

The recent jump in home prices has led to speculation that the rapid surge in home prices could be the sign of a new housing bubble similar to the one that led to the Great Recession. Is it? The not-so-short answer is, not yet. An increase in prices itself does not signal a bubble. An unsustainable increase, not supported by other data, however, would. In the run-up to the 2006 collapse, the higher prices--which had been trending up for four years--led to a sharp uptick in construction wholly unsupported by demographics.

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