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REPORT: PRICE GAINS TO MODERATE IN 2ND HALF OF 2013 In July, national home prices jumped 9.3 percent year-over-year, led by gains in the West, according to Clear Capital's latest housing report. When divided by region, prices in the West showed the most improvement, surging 17.8 percent over the last year, followed by the South (+7.6 percent), the Midwest (7.5 percent), and the Northeast (+4.8 percent). Despite the recent streak of impressive home price gains, Clear Capital expects the market to experience more moderate and sustainable increases in the last half of 2013 as homebuyers transition into the "new normal," the report explained. "A rising price floor will dampen some potential homebuyers' appetites, particularly as recent gains bring many markets back into pre-bubble equilibrium. In other words, homebuyers are starting to adjust to the new normal, where steep discounts from the peak are not as attractive as they once were," said Dr. Alex Villacorta, VP of research and analytics at Clear Capital. Furthermore, rising inventory should also ease recent pressure on prices, according to the report. Among metro areas, price gains were especially strong in Las Vegas, where home values spiked 31.2 percent from last year. However, Clear Capital explained the lower median price of $145,000 in Las Vegas may, in part, explain the acceleration in prices. On the other hand, San Jose has a median price of $710,000, but prices rose 26 percent year-overyear, indicating demand is "fueled by a strong local economy," the report stated. Meanwhile, quarterly growth rates for metro areas were much more moderate, at or around 4 percent for the three leading markets: Las Vegas, Milwaukee, and San Francisco. "We expect most of the major markets across the country to follow the path of sharp upward corrections in the short term, followed by moderating gains as markets fall back in line with their long-run levels," Villacorta said. "Phoenix, for example, is now seeing quarterly growth that supports a yearly growth rate more in line with 10 percent, as opposed to the current yearly gains of 23.3." LPS REPORTS BROAD-BASED SPIKE IN NEW DELINQUENCIES IN JUNE In June, more than 700,000 loans that were once current became newly delinquent, leading to a near 10 percent month-over-month spike in the national delinquency rate, according to a report from Lender Processing Services (LPS). The sudden uptick in delinquencies, however, is actually not surprising when looking at previous trends, LPS found. "June's increase in delinquencies is representative of a documented seasonal phenomenon," said Herb Blecher, SVP of LPS Applied Analytics. "Over the last 18 years, similar changes occurred in June for all but four of those years." When examining the increase on a quarterly basis, Blecher also noted the rise was actually moderate compared to previous years. "Since 1995, delinquency rates have risen from Q1 to Q2 in all but two years, with an average 7 percent increase. By comparison, the 2013 Q1 to Q2 increase was just 1.34 percent," he explained. The month-over-month upswing in early delinquencies was actually seen across all 50 states, 66 with Utah and Colorado experiencing increases averaging 30 and 32 percent, respectively. The high number of new delinquencies also impacted cures for early delinquencies, which fell to a five-year low. Meanwhile, serious delinquencies still trended downward and hovered near pre-crisis lows at 0.71 percent as of June. Foreclosure inventory decreased as well, falling to 2.9 percent, down by 3.9 percent from May and 28.4 percent from a year ago. In judicial states, the foreclosure inventory rate was much higher, at 4.91 percent, but sits 26 percent below the peak level. Non-judicial states averaged a foreclosure inventory rate of just 1.5 percent and were 50 percent below their peak. KNOW THIS A survey conducted by the National Association of Realtors in March reveals 86% of Realtors reported constant or higher prices compared to last year.

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