Real Estate update

We  mu st concede that we are going through a period of anomalous
financial market movement. It is happening with a high degree of regularity, which
really complicates everything buyers, those that are refinancing and those that are contemplating when
to lock in fixed rates.

We emerged from the past week with a nominal improvement for the home loan rate continuum
as questions arose about how strong the housing recovery, that seems to be emerging, will be. What we are hearing is many markets are being plagued by a lack of housing inventory for sale as a restraining factor.

We have also seen a sharp decline in bank owned properties as sales individual units and bulk sales
to investors are finally working down REO inventories and this could lead to a more normal cycle
of listing and sales volumes in the months ahead.

In the financial markets, the stock markets largely remain in fear of the sovereign debt problem in Europe and the potential for a decline of American corporate profits. The credit markets are
being troubled by comments coming from Wall Street ‘market makers’ and pundits. Perhaps in an
effort to buoy stock prices, they are openly discussing (in the mainstream media) their perception of a
Treasury market bubble forming. To put it plainly, fear seems to be the primary driving force in the
global financial markets and this is not a healthy paradigm.

If we are to look to a single barometer for the where home sales might go in the immediate future, it would be the weekly new mortgage loan applications index from the Mortgage Bankers Assn. There is an unmistakable and steady upward progression of purchase loan applications coming in on a
weekly basis. The subtle underlying data clearly implies a housing market recovery is at hand. The
only question is the intensity of it. The upcoming week will bring us the March pre-owned home
sales and the “experts” polled by the mainstream media are calling for sales gains over the February
sales level.

It is likely that the Monday morning release of retail sales figures for March will set the tone of trading for the week. The universal perception in the forecasting community is the retail sales figures will show some modest gains, but nothing close to the previously reported 1.1% rise for February sales. Yes, the upcoming week
should be interesting and could keep home loan rates on its current downward trek.

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