Home prices for existing home sales continue to remain firm despite that a little more inventory is coming on the market. There is slight concern however in that the number of existing home sales declined by 1.2% in the month of June. Some experts tend to think that the decline is due to rising interest rates for mortgage financing however, I do not necessarily agree.
This report is for the month of June however mortgage rates did not jump until mid to late June which is actually late in the month to have really impacted the June home sale totals The good news in the report is that existing home sales are 15.2% higher than the same time last year.
More sellers these days are putting their homes on the market, which is helping to ease what is still a noticeable lack of available home supply. The lack of supply is one of the reasons that home sales have not been quite as robust as we would think based upon demand. A big positive for home sellers is that houses are not staying on the market very long at all, at 37 days in June versus 41 days in May.
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A lack of distressed properties is one major reason behind the tight housing supply. Home sales related to distressed properties represented only 15 percent in the month which is the lowest reading since this number has been tracked beginning in 2008. Foreclosures only made up 8 percent of the month's sales.
The Federal Housing Finance Agency confirmed what we already know about rising home prices. The most recent report by the agency shows that home prices rose 0.7% in the month of May and that prices overall are 7.3% higher than a year ago. This is a countrywide average increase however, some parts of the country, especially the west coast, are experiencing significantly higher increases in home values.
All indications are that the fundamentals for the future of new homes sales is very strong. Inventory is extremely low at 3.9 months at the current rate of sales. The pace of new home sales are actually at a post recovery high of 497,000.
The rapid run up of mortgage rates has eased and mortgage applications for home financing has appeared to have stabilized. Applications for home purchases declined 2.0% however that is more a reflection of home buyers temporarily pulling back from pulling the trigger on purchasing due to the recent jump in rates. Many home buyers that need mortgage financing are taking a short breather to see what is going to happen to rates in the coming weeks. Demand for housing remains very high. Refinance applications increase by 1%.
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Market moving reports for next week are:
- Monday July 29th 2013 Pending Home Sales
- Tuesday July 30th 2013 S&P Case-Shiller Home Value Index and Consumer Confidence
- Wednesday July 31st - MBA Applications, ADP Employment Report and GDP
- Thursday August 1st - First Time Jobless Claims and ISM Manufacturing Index
- Friday August 2nd 2013 National Unemployment
As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate information. I welcome the opportunity to serve you in any way I possibly can.
Please feel free to reach me at 661-505-4300 .