June Existing Home Sales Dip While Supply Rises

The slowing economy and the current rates of foreclosures, continues to drag down and impede any recovery attempts by the housing market.

According to a report released on Thursday, by the National Association of Realtors [NAR], for the month of June: existing-home sales, fell 2.6 percent to an annual rate of 4.86 million versus 4.94 million consensus.

Home sales, are currently 15.5 percent lower than the 5.75 million-unit rate in June of fiscal 2007. The NAR also points out, the national median existing-home price was $215,100 in June, which is down 6.1 percent versus a year ago with sales down in the Northeast, Midwest, and South, but up in the West.

Total month supply of existing homes increased to 11.1 in June from 10.8 in May, while housing inventory at the end of June rose 0.2 percent to 4.49 million existing homes available for sale.

NAR chief economist, Lawrence Yun, said first-time home buyers are critical to the health of the housing market.

 

“About four in 10 homes are purchased by first-time buyers, which frees existing owners to trade up,” Yun said. “With many potential first-time home buyers on the sidelines, a first-time buyer tax credit would have a significant positive impact on both housing and the economy.

Combined with permanent increases to mortgage loan limits and enhancing the FHA loan program, added Yun - the housing stimulus package working its way through Congress would go a long way toward helping consumers and boosting the overall economy.”

 

Despite the overall sales numbers, the rate of decline in existing homes sales has slowed significantly when compared with 2005-2007 period, suggesting the pace of home sales is very close to a bottom. Unpublished snapshot data notes NAR, shows existing-home sales rising significantly from a year ago in Bakersfield, CA, Fort Myers, FL and Las Vegas.

According to Freddie Mac, the 30-year fixed-rate mortgage average was up from last week’s 6.26% to 6.63%. “Market concerns about rising inflation, further weakness in the housing market and greater probability that the Federal Reserve will raise short-term rates this year all combined to push mortgage rates higher this week.” said in a statement Frank Nothaft, Freddie Mac’s chief economist.

Comments

[flcay]

Way to go.. raise the interest rate on mortgages and we all shall suffer. If the banks want to put back the RE value in their porfolio, try lowering the rate and require full doc on every loan.

[ArnoldCountry]

Problem is, they can't. All loans are pretty much sold to GSE's and they are losing money left and right and they need to make up the losses. Dont you just see that cat chasing its tail?

[Don W]

One thing missing from this analysis: by-month-adjusted-sale... Everyone in the industry knows that home sales in the summer months are easily 20% higher than winter months, with late July and early August being peak sales - regardless of the market. Saying that the rate of decline from May to June being less than previous months/years shows that the market is close to a bottom is completely missing important market trends and factors. Come November and December when the sales figures show an substantial decrease in sales month by month (due to the periodic nature of home sales as well as the economy/interest rates/tightening loan requirements), and those who try to 'slow the panic' by writing optimistic columns will be left with little to stand on as far as credibility. Oh, wait - they'll just write another column to explain why they were right but that unforeseen influences thwarted their 'expert projections.'

[Redfish Mark]

Don w. - right on the mark about the misleading leading metric of month to month sales changes. Rising inventory (during what should be a seasonally busy sales month) still portends pain in the single family housing sector.

[TN hick]

something ain't right 'bout this"

"Existing condominium and co-op sales rose 1.7 percent to a seasonally adjusted annual rate of 590,000 units in June from 580,000 in May, but are 19.7 percent below the 735,000-unit level a year ago. The median existing condo price4 was $224,200 in June, which is 2.2 percent lower than June 2007.

for example: 1 - 580 / 735 => ~ -0.2109 or about -21.1% decline y/y

aside from the bias to the positive spin [i.e.; "...rose 1.7% [m/m omited], this makes you wonder about the accuracy of data that you can't verify

oh well, more koolaid please

[TN hick]

opphs - my data ain't much better; should have use 1 - 590 / 735 => ~ 19.7%

but the positive bias is still there

also, for the five sectors cited, the decline is about -17.2% y/y