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Explaining the recovery in home purchase demand

Record low mortgage rates, plenty of spare time, the need for more space, increased savings and the anticipation of picking up a cut-price home all help explain the surprise recovery in mortgage applications for home purchase. But tighter credit conditions mean an increasing share of those mortgage applications will be denied and, with inventory at record lows, bargains will be hard to find. That argues against a similar rapid rise in existing home sales over the next couple of months.

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