Last week we delved into the plethora of positive home-price data that has emerged in recent months. This week, we are glad to say, we add to the tally.

CoreLogic reports that national home prices increased 1.1 percent year over year in April, to mark a second year-over-year increase. Looking at month-over-month data, we find that prices increased 2.2 percent. When distressed sales are removed, the month-over-month price increase jumps to 2.6 percent.

Of course, all real estate is heterogeneous. When we look at more localized markets, we find the greatest price improvements continue to materialize in the bigger bust states: CoreLogic reports prices are up 8.8 percent in Arizona, 5.5 percent in Florida, and 5.4 percent in Utah.

On the other side, we find pockets of depreciation are moving east, with Delaware posting a 11.9-percent price decrease and Rhode Island a 6.2-percent decrease. The silver lining is that the largest price decreases are occurring in two of the country's smallest states – Rhode Island and Delaware. So geographically speaking, large price decreases appear contained within smaller locales.

We are encouraged by the fact that price appreciation is spreading to higher-end markets. Over the past year, price appreciation was the result of strong demand for lower priced homes – those selling below $140,000. Asset valuation firm Clear Capital reports price appreciation is spreading to mid- and top-tier segments in many markets. We're seeing a more diverse market – one that's shifting more toward owner-occupied buyers and away from investors.

Now, we'd like to see a more diverse mortgage lending market, but in the meantime we continue to see a historically low lending-rate market. This past week we saw the yield on the 10-year U.S. Treasury note hit an all-time low of 1.46 percent. Thirty-year mortgage-backed securities issued by Fannie Mae yield less than 3 percent. Not surprisingly, the prime 30-year fixed-rate mortgage remains well below 4 percent in most markets. So why do such low rates persist? 

Well, there is growing concern U.S. economic growth is stalling. Only 69,000 jobs were created in May, far below the 150,000 jobs most market analysts were expecting. Lower job growth correlates with a slowing economy, which, in turn, correlates with lower loan growth and lower lending rates.

Events unfolding in Europe might be the more influential cause, though. It seems Greece's probability of bankruptcy and ejection from the European Union rises by the day. What's more, Spain's economy continues to tank, with economic growth at nil and unemployment at well over 20 percent. Both countries are experiencing bank runs, but not in the traditional sense of long lines of people queuing up to pull out money. A bank run today can occur with a simple mouse click.

Much of the money flowing out of the Mediterranean is flowing into dollar-denominated assets, such as U.S. Treasury securities. The increased flow of money into these securities drives down yields and helps drive down mortgage lending rates.

Courtesy of Jessica Regan.

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