REO

The economy expanded at a modest to moderate pace from early April to the end of May, the Federal Reserve reported Wednesday in its periodic Beige Book. The assessment reflected a weakening from the report in April when the expansion was characterized as moderate. Economic outlooks, according to the report, ""remain positive, but contacts were slightly more guarded in their optimism."" Activity in the New York, Cleveland, Atlanta, Chicago, Kansas City, Dallas, and San Francisco districts was described as moderate, while the Richmond, St. Louis, and Minneapolis districts noted modest growth.

Purchasing foreclosures also means discounts, but with the markdown is the price of repairs. According to RealtyTrac, foreclosures or REOs sold at an average discount of 27 percent compared to non-distressed properties in the first quarter of 2012. Through an FHA 203(k) loan, potential buyers who want to purchase a discounted foreclosure but don't have cash for the repairs may find a way to receive financing.

For the first time since August 2010, home prices rose on both a quarterly and yearly basis, according to the May 2012 Home Data Index (HDI) report released by Clear Capital. Quarter-over-quarter, prices appreciated 0.4 percent, the first quarterly increase since November 2011. Year-over-year, prices rose by 0.1 percent, according to the index. The increases were attributed to stronger regional growth in the West, Northeast, and South, as well as a rise in REO-only prices.

Even though Radar Logic reported a monthly increase in home prices for March, the analytics company expects prices to fall and gave credit to temporary market forces for recent strengths seen in the housing market. According to Radar Logic, the RPX Composite price, which tracks home prices in 25 major metropolitan areas, showed a 1.8 percent increase on a monthly basis, but decreased by 0.87 percent year-over-year in March. With distressed homes remaining a significant portion of home sales transactions, Radar Logic dismissed the monthly increase and said significant discounts for distressed properties in relation to non-distressed means a further fall in prices.

Consumer spending grew just 0.3 percent in April, up slightly from 0.2 percent in March, the Bureau of Economic Analysis reported Friday. Economists had expected spending to be up 0.3 percent. At the same time, personal income grew 0.2 percent in April, BEA said, compared with market expectations of a 0.

The economy added just 69,000 jobs in May compared with a revised 77,000 in April down from the originally reported 115,000, the Bureau of Labor Statistics reported Friday. The closely watched unemployment rate inched up to 8.2 percent - a function of an increase in the nation's labor force to the highest level ever. Economists surveyed by Bloomberg had expected the number of jobs to increase by 150,000 and the unemployment rate to remain at 8.1 percent.

First time claims for unemployment insurance rose to 383,000 up from the prior week's 373,000, revised up from the previously reported 370,000, the Labor Department reported Thursday. Economists had expected the report would be unchanged at 370,000 initial claims.

For pre-foreclosure homes, which are residential properties in default or scheduled for auction, sales were at their highest quarterly level since the first quarter of 2009, according to RealtyTrac's foreclosure sales report. Pre-foreclosure sales, which are typically sold through the short sale process, accounted for 12 percent of all sales during the first quarter. Pre-foreclosure homes sold for an average price of $175,461 in the first quarter, a 10 percent decrease from a year ago. The average pre-foreclosure sales price was the lowest in the history of RealtyTrac's foreclosure sales report, which began in the first quarter of 2005.

In April, the number of completed foreclosures was 66,000, down 15 percent compared to the same month a year ago when there were 78,000 completed foreclosures. Month-over-month, the number of completed foreclosures remained unchanged. The number of homes in foreclosure inventory as of April 2012 shrank slightly from 1.5 million homes a year ago to 1.4 million. Among the five states with the highest number of completed foreclosures - California, Florida, Michigan, Texas, and Georgia - only Florida is a judicial state. These states alone account for 48.8 percent of all completed foreclosures nationally.

The Pending Home Sales Index (PHSI) gave back its entire March increase in April, falling to 95.5 from 101.1 one month earlier, the National Association of Realtors reported Wednesday. The March index was revised downward from the originally reported 101.4 adding to the gloomy report. Economist had expected the index to increase 0.5 percent from March.Even with the decline though, the index is up 14.4 percent since April 2011, but is now at its lowest level since December, dampening expectations at the onset of the home-buying season.