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 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 Unpublished snapshot data notes NAR, shows existing-home sales rising significantly from a year ago in Bakersfield, CA, Fort Myers, FL and Las Vegas.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.