The document summarizes the latest data and trends in the US housing market. It reports that home sales increased in August after declining due to the expiration of the homebuyer tax credit in July. Home prices remained stable year-over-year while mortgage rates hit new lows. Inventory levels declined slightly. The Federal Reserve aims to support the economy through low interest rates. Fannie Mae is offering incentives for buyers of foreclosed homes to boost sales.

1. Released: October 7, 2010 Commentary 2 The Numbers That Drive Real Estate 3 Recent Government Action 9 Topics for Home Buyers, Sellers, and Owners 11

3. The Numbers That Drive Real Estate Home Sales 4 Home Price 5 Inventory 6 Mortgage Rates 7 Affordability 8

4. Latest Data Release: September 23, 2010 Source: National Association of Realtors Home Sales In Millions Home sales began to rebound in August, increasing 7.6% compared to the previous month. This increase follows a large drop caused by the expiration of the Federal tax credit in July. Sales are expected to slowly rebound as the market finds its footing without leaning on the government for support. Understandably, first-time buyers fell from 38% to 31% in August from July. Over the same time period, investors rose from 19% to 21%, reflecting those opportunistic individuals who are taking advantage of an exceptional time in the market with historically low rates, temporarily idle demand, and affordable but stable home prices. August ‘08-’09 August ‘09-’10 Impact of Tax Credit Deadline Seasonally Adjusted Home Sales - In Millions

7. Mortgage Rates 30-Year Fixed 30-Year Average – 8.9% 1-Year Average – 4.82% Mortgage rates once again set new record lows in early September and remained below 4.4% throughout the month. The Federal Reserve Board stated concern about the slow pace of recovery, and it has promised additional support through monetary policy if necessary. As economic activity gains momentum, rates will rise to keep inflation at an acceptable level. Source: Freddie Mac 16% drop from this year’s high on April 8

9. Recent Government Action Bonus for Buyers 10

11. Topics for Home Buyers, Sellers, and Owners Perfect Time to Buy 12 Options for Investors 13

13. Your Local Market Although it is important to stay informed about what is going on in the national economy and housing market, many different factors impact the real estate market in your own area. Talk to your KW associate for assistance interpreting the conditions in your local market . KW associates are equipped with the knowledge and information to help you navigate through the home-buying or selling process in this challenging market.