There was yet more confirmation this past week on what we already know: Home prices are rising. The S&P/Case-Shiller Home Price Index provided the latest positive data set. According to Case-Shiller, home prices pushed ahead a very strong 0.9 percent in May, which follows a 0.7 percent gain in April and a 0.8 percent gain in March. Best of all, the latest gains were widely dispersed, with 18 of the 20 cities Case-Shiller follows posting gains.

We tend to give Case-Shiller short shrift, because the data are two months old. Fresher data are found at Trulia, Zillow, and CoreLogic. But Case-Shiller is widely followed in the media, so this string of positive numbers should help to dispel any lingering concerns over a double-dip home-price recession.

The trend in foreclosures is a key factor in resurgent home prices. CoreLogic reports foreclosures continue to abate. In June, 60,000 foreclosures were completed, a 25 percent drop from the 80,000 foreclosures completed in June 2011. The current monthly rate of foreclosures is at a level unseen since 2007. Fewer foreclosures means less supply. Less supply, in turn, helps elevate home prices.

The number of foreclosures processed could have actually been smaller. CoreLogic CEO Anand Nallathambi addressed an issue we've been addressing off and on for the past year – regulation. In CoreLogic's foreclosure report, Nallathambi said, “[W] believe even more can be done to reduce the inventory of foreclosures by decreasing the level of regulatory uncertainty and expanding alternatives to foreclosure."

Regulation is an issue most of us share a common opinion. There's simply too much of it today. At this point, it's beneficial to encourage more risk taking, albeit rational risk taking. In other words, lenders should have more leeway in assessing borrower risk. The big frustration many of us confront are borrowers who don't fit the template, but who would make a good credit risk nonetheless. A slower housing recovery is the corollary to excluding these potential borrowers from the market.

With that off our chest, we can report that mortgage rates once again touched a new low, but just barely. In fact, rates across most products moved slightly higher as the week progressed. The most repeated explanation for the slight uptick is that investors are somehow less concerned over the ongoing European debt crises, so they've moved some money out of haven U.S. Treasury securities and into other investments.

When the European debt crises – centered on Spain, Greece, Portugal, and, to a lesser extent, Italy – will finally be resolved is anyone's guess. We expect it won't be resolved anytime soon. So when you couple continued fear in the market, which motivates people to invest in safe, low-yield debt, with the Federal Reserve's policy to hold long-term lending rates abnormally low through 2014, you're likely looking at sub-4 percent 30-year lending rates through the first quarter of 2013.

Of course, this can all change should the economy suddenly ignite, but it's difficult to see that occurring until uncertainty surrounding the November elections is removed. In other words, borrowers have time on their side, at least when it comes to accessing money. Problem is, if they are borrowing to buy a home, time isn't on their side. Waiting means they risk paying a higher price. That's something worth repeating to clients.

Courtesy of Jessica Regan.

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