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REPORT: HOUSING STABLE DESPITE 'BUBBLE-LIKE' GAINS IN AUGUST August price gains were reminiscent of those last seen during the peak of the bubble, but analysts at Clear Capital insist there's nothing to fear at this point. The company reported in its latest Home Data Index that prices were up 10.2 percent yearover-year in August. By Clear Capital's metrics, the last time the nation saw double-digit yearly price growth was mid-2006, the height of the bubble. (Other sources, including the monthly Case-Shiller Indices, have been reporting regular double-digit growth for some time.) However, with prices still off 32.5 percent from their previous highs (putting them in line with prices circa 2002), the firm isn't concerned about the possibility of a new bubble. "With the continued strengthening of home price trends in August, the need for perspective on market activity is even more important," said Dr. Alex Villacorta, VP of research and analytics at Clear Capital. Looking under the surface trends, Villacorta notes the low-tier price segment of the housing market saw quarterly gains of 2 percent—the lowest since April 2012—indicating that sector is already on a more moderate growth path. Growth for the low-tier segment peaked in April 2013 at 4.1 percent. "Considering the low-tier price segment of the housing market led the recovery, the cooling in this segment will likely transfer through to the broader housing market," Villacorta said, also observing that the industry is heading out of its busy season and into the slower fall and winter months. "That's not to say the recovery is slated to stall, rather growth patterns are likely to return to more historical rates of growth, between 4 percent to 5 percent, rather than align with bubble-like growth." He continued: "At the end of the day, this is still great news for housing. Today's housing market is not irrational or out of balance within the broader context of housing trends, but as we learned, sustaining this pace of growth is simply not healthy. Our call for moderation is the next phase of a more mature recovery." TITLE PREMIUMS RISE IN Q2 Americans are paying more for their title insurance needs, according to a recent report by the American Land Title Association (ALTA). The group reported a 20.6 percent rise in title insurance premium volume during the second quarter of 2013 when compared to the same period a year ago. According to ALTA's 2013 Second-Quarter Market Share Analysis, the title insurance industry generated $3.3 billion in title insurance premiums during the second quarter of 2013 compared to $2.7 billion during the second quarter of 2012. "The title insurance industry continues to show financial stability and strength as the housing economy as a whole is improving," said Michelle Korsmo, ALTA's CEO. "All 50 states and Washington, D.C., have once again experienced improvement, according to our market analysis for the second quarter of 2013." The states generating the most title insurance premiums during the second quarter of 2013 were California ($451.4 million, up 8.7 percent compared to the second quarter of 2012), Texas ($436.4 million, up 30.8 percent), Florida ($294 million, up 34.8 percent), New York ($226.1 million, up 16.8 percent), and Pennsylvania ($148.5 million, up 31.3 percent). Six states experienced a 35 percent or more increase in title insurance premiums during the second quarter of 2013 compared to the same period a year ago: Louisiana (50.5 percent), North Dakota (45.6 percent), West Virginia (42.8 percent), Georgia (39.9 percent), Iowa (35 percent), and Florida (35 percent). The breakdown of market share was led by the Fidelity Family of title insurance underwriters with 33.5 percent of the market during the second quarter of 2013, while First American acquired 26.2 percent, Old Republic reported 14.5 percent, and Stewart gained 12.4 percent. Meanwhile, independent underwriters held 13.4 percent of the market during the second quarter of 2013, up from 12.77 percent market share during the same period a year ago. VERBOSITY "Housing prices are up 11.8% year-over-year through Q2 and 10.5% excluding distressed sales. This is the strongest home price assessment since 2005." —Barclays Research 30 DELINQUENCIES CONTINUE DECLINE; HIGHEST AMONG ALT-A, SUBPRIME LOANS Delinquencies and foreclosures are continuing to decline with higher concentrations among Alt-A and subprime loans, according to the latest Mortgage Market Monitor from Lender Processing Services (LPS). Foreclosures are down 31 percent yearover-year in July, while delinquencies are down 9 percent, according to LPS data. Both delinquencies and foreclosures declined over the 12-month period among all types of loans, except Alt-A and subprime loans. Delinquencies rose 1 percent among Alt-A loans and 3 percent among subprime loans. In fact, more than one-third of current delinquencies are made up of these two loan categories. LPS reported foreclosure starts year-to-date as of the end of July are their lowest since 2007, and "[g]iven that nearly 50 percent of these are repeat foreclosures means that the picture is even more positive than a surface reading of the numbers might suggest," said Herb Blecher, SVP of data and analytics at LPS. Distressed sales are also making up a diminishing share of home sales nationwide, according to LPS. For the first half of this year, distressed sales made up 10 percent of home sales, down from 16 percent over the first half of last year. The percentage of noncurrent loans—both delinquencies and foreclosures—continues to remain highest in judicial states. Seven of the top 10 noncurrent rates are in judicial states, with Florida topping the list. However, Mississippi—a nonjudicial state— took the No. 2 spot. The other two nonjudicial states in the top 10 were Nevada and Rhode Island, which claimed the sixth and seventh spots on the list. Nationally, 9.2 percent of mortgage loans are noncurrent, which is a 16.9 percent decline from last year. LPS also highlighted prepayment trends among the rising interest rate environment in its report. "[E]ven with that increasing interest rate pressure, July's monthly prepayment rates are still about where they were this time last year, when rates were at historic lows," Belcher said. "In fact, they are roughly at the same levels as the heights of the 'mini refinance booms' in 2010," he said. However, "as interest rates continue to climb, we can expect that both prepayments and associated originations will decline," he added.

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