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Market Studies

Fed’s Duke Says Recovery Is Sustainable and Will Strengthen

The evidence is clear that the recovery in housing is finally under way, but the question that remains open is whether the positive trends in housing are sustainable, Federal Reserve Board Governor Elizabeth A. Duke said in a speech at the Mortgage Bankers Association's Mid-Winter Housing Finance Conference. In her view, the recovery does appear to be sustainable. ""I do not believe that a flood of houses on the market from households that are currently underwater or from bank REO is likely to materialize or to be sufficient to outpace growing demand,"" she said.

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Commentary: Go With The Flow

Perhaps the most important piece of economic news in the last few days was not the continued drop in the unemployment rate or the positive blurbs in the Beige Book or even the Dow reaching a new record high, but Thursday's quarterly Flow of Funds report. According to the report for Q4 2012, household assets grew to $79.5 trillion in the fourth quarter, an increase of $1.3 trillion--not too shabby. Household financial assets were up $784 billion to $54.4 billion but home equity (the value of household real estate less loans against that real estate) grew $452.8 billion, the result of two moving parts: real estate values (which increased) and household mortgage liabilities, which dropped.

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Fitch Sees Potential in FHFA’s Goals to Attract Private Capital

The goal of attracting private capital into the mortgage market is at the center of discussions throughout the industry and the government. Thus far, ""efforts by the Federal Housing Finance Administration and other federal agencies to provide incentives for the creation of a vibrant private mortgage securitization market have been largely unsuccessful,"" according to Fitch Ratings. However, the ratings agency does see some promise in a couple of FHFA's goals.

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Administration Reports Improvements from Housing Market, Servicers

The housing market showed signs of progress across the board, but the overall recovery is still fragile, hence the need for efforts to prevent avoidable foreclosures, according to the Obama Administration Housing Scorecard for February. ""House prices are steadily rising above the mid-crisis lows in markets throughout the country, while inventories of new and existing homes are further tightening, and even estimates of the 'shadow inventory' are down,"" said HUD deputy assistant secretary for economic affairs Kurt Usowski. ""That said, we still remain considerably below long-term normal levels of home sales and production.""

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CMBS Delinquencies Down for 9th Straight Month

Two large loan modifications helped bring down the CMBS delinquency rate, which fell 30 basis points (bps) to 7.61 percent, down from 7.91 percent in January, according to Fitch Ratings. The dollar balance of delinquent loans also sank below the $30 billion mark, a first since February 2010, Fitch stated. The dollar balance of delinquent loans also sank below the $30 billion mark, a first since February 2010, Fitch stated.

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Capital Economics Revises Home Price Forecast Upward

Strong demand and tight inventory have brought existing home sales back to ""normal"" levels, and further gains are possible, according to the latest market report from Capital Economics. Additionally, market conditions may prompt lenders to ""loosen the purse strings slightly"" and lend a little more freely. These conditions, combined with broader economic indicators, lead Capital Economics to revise its previous forecast of a 5 percent price gain this year up to 8 percent. Next year's projection is a smaller 4 percent gain.

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Economy Adds 236K Jobs in February; Unemployment Rate Slips

The economy added 236,000 jobs in March and the unemployment rate to 7.7 percent, its lowest level since December 2008, the Bureau of Labor Statistics reported Friday. Economists had forecast payrolls would grow by 160,000, and that the unemployment rate would drop to 7.8 percent. Job growth for December, originally reported at 196,000, was revised upward to 219,000, while January was revised down to 119,000 from the originally reported 157,000. One concern from the report was the number of multiple jobholders, which increased 340,000. This means new jobs went to an individual already employed, making the decline in the unemployment rate even more significant.

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Zillow: Top-Tier Homes Lead Inventory Crunch

Inventory shortage continues to darken the skies over the housing market as the spring selling season approaches, Zillow reported Thursday. Zillow observed a 16.6 percent year-over-year decline in its overall number of listed homes in late February, indicating an inventory crunch just as buyers start to feel more comfortable dipping their toes into the market. Nationwide, the greatest year-over-year inventory declines were among more expensive homes, with the availability of top-tier properties falling 20.5 percent on an annual basis.

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Initial Unemployment Claims Slip Again

Initial unemployment insurance claims fell 7,000 for the week ending March 2, closing the week at an advance estimate of 340,000, the Labor Department reported Thursday. The decline represents the fourth drop in the last five weeks, indicating a downward trend in layoffs.

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