Housing Market
Both new and existing home sales posted gains in June giving further evidence that the worst of the housing crisis may finally be over.New home sales jumped 11.0% in June to a seasonally-adjusted annual rate of 384,000 homes from a revised May figure of 346,000.  This was the highest rate of new home sales since November.  Sales for the previous three months were revised lower by 5,000 units.  In June, new home inventories declined to 282,000 from a revised June figure of 290,000 on a non-seasonally adjusted basis.  Non-seasonally adjusted units of unsold inventory have not recorded a monthly increase since May 2007 and are now at their lowest levels since February 1999 as builders continue to scale back building activity.  There are now 8.8 months of supply on a seasonally-adjusted basis based on the current sales pace which is the lowest it has been since October 2007.  In June, median new home prices dropped to $206,200 from a revised a downwardly revised May figure of $219,000.  Median new home prices fell 5.8% from last month and are down 12.0% from the same time last year.  The drop in new home prices helped to increase affordability which positively impacted sales last month.Annualized sales of total existing homes in June increased 3.6% from May levels to 4.890 million units.  This was the first time since 2004 that existing home sales have posted three consecutive months of increases although sales in May were revised lower by 50,000 units.  Sales of existing homes are down just slightly from their year-ago levels of 4.9 million units.  More robust activity out West, which has been driven by foreclosures and short sales, has helped overall existing home sales figures.  Median existing home prices in June increased to $181,800 from $174,700 in May.  This is the highest median existing home prices have been since October.  Existing home inventory declined from the previous month as lower prices helped to spur buying activity and reduce the number of homes for sale.  Inventory of existing homes declined 0.73 percent to a preliminary 3,823,000 units from 3,851,000 units in May.  At the current sales pace, there are 9.4 months of supply of existing homes on the market which is the lowest it has been since December.National average mortgage rates increased from the previous week to 5.25% in the latest Primary Mortgage Market Survey released weekly by Freddie Mac on July 30th.  This is the second straight week that rates have increased and the highest they have been since the beginning of July.  In the week ending July 24th, the MBA’s seasonally-adjusted Purchase Index declined slightly to 262.0 from 262.1 in the previous week.  The latest figure reflects a 0.04% decline from last week and a 15.35% drop from the same period last year.  This is the tamest annual decline in purchase mortgage applications since the end of last year.