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Agency Review» Delinquency Rates 5.59% fannie single family freddie single family 5.07% june 2012 4.55% 4.03% fannie » 3.53% freddie » 3.45% price gains, including Detroit (8.6 percent up) and Miami (6.4 percent up). However, prices continued to drop in areas still flooded with foreclosed properties, including Atlanta (down 17.4 percent), Las Vegas (down 7.4 percent), and Memphis (down 4.7 percent). Rent prices also increased, driven Many of the hardest-hit markets posted 3.51% primarily by increased apartment demand. The mortgage payment for a median-priced home is now less than the median asking rent, making buying a more attractive choice in many parts of the nation. This follows a separate report from Zillow that also suggested buying is the less costly option. As housing markets stabilize, the demand 3.00% 2.48% 1.96% 1.44% note: Delinquent loans reported here include all single-family loans 90 or more days past due as a percentage of portfolio size. Historical data covers a moving 12-month period. Source: Fannie Mae June 2012 Monthly Summary and Freddie Mac June 2012 Monthly Volume Summary from first-time buyers is expected to pick up. In any event, the increased affordability of buying will likely push home prices upward as demand rises. Fiserv advised investors to look west for price appreciation as eight of the top 10 markets projected to grow at the fastest rate in the next year are in western states, including Oregon, Idaho, California, and Washington. Of course, much of this forecasted 0.92% 0.40% growth may be thrown off track if economic conditions deteriorate. "The state of the overall economy presents Fiserv Forecasts Home Price Growth for Next Two Years composition have provided a foothold for housing prices to start climbing, according to Fiserv, Inc. The company released its Case-Shiller Shrinking inventory and shifts in sales Home Price Insights report in early August, showing that, after six years of decline, home prices are finally starting to stabilize. Prices increased in 40 percent of the surveyed 384 metro areas in the first quarter of 2012, and the report showed that it's actually cheaper to buy than rent in many U.S. markets. Single-family home prices increased in 151 out of 384 metro areas in the first quarter of the year compared to the same time in 2011. While average U.S. home prices fell by 1.9 percent on a year-over-year basis and are expected to fall another 1 percent in the next year, Fiserv Case- Shiller forecasts a 5 percent increase between the first quarters of 2013 and 2014. Fiserv chief economist David Stiff attributed the price increases to rapidly falling inventory. 24 dropped below 2.5 million units, the lowest levels since 2004. This shrinking supply of unsold homes is nudging home prices upward in selected markets," said Stiff. "However, negative equity remains a factor constraining supply in some markets since many underwater homeowners cannot come up with the cash to cover the difference between their outstanding mortgage balances and the current market value of their homes. Many positive equity homeowners are also keeping their houses off of the market, waiting for price increases to boost their selling profits." In addition, the changing composition of "Inventories of single-family homes have the biggest risk to the housing market," said Stiff. "The economic recovery has stalled each spring/summer during the last three years, and last summer's economic stumble was accompanied by a sharp decline in consumer confidence, which cut into home sales activity and pushed home prices down a little further. If confidence were to drop by a similar amount this year, either because of the monetary crisis in Europe or the political impasse in Washington, D.C., then we could experience another downward leg in home prices. "However, given that owner-occupied housing is incredibly cheap historically and falling confidence would be accompanied by lower mortgage interest rates, we may be at a point where housing markets can finally withstand a weak economy." STAT INSIGHT unsold inventories and homes sold appears to provide a boost to prices in some areas. In many crash markets, the share of foreclosed sales is shrinking as banks promote short sales and investors grab up repossessed homes. As a result, heavily discounted sales make up a smaller percentage of overall sales, resulting in an upward swing in prices even in relatively flat markets. 183,000 Short sales completed during the first six months of 2012. Source: CoreLogic 05/12 04/12 03/12 02/12 01/12 12/11 11/11 10/11 09/11 08/11 07/11 06/11 05/11 04/11 03/11 02/11 01/11 12/10 11/10 10/10 09/10 08/10 07/10 06/10 05/10

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