Housing Market
New and existing home sales both declined in June. New home sales in June declined for the second straight month after posting its first monthly increase since October 2007 in April. Sales eased 0.6% in June to a seasonally-adjusted 530,000 homes, down from a revised May figure of 533,000. Sales for the previous three months, however, were revised higher by 50,000 units. The number of new homes for sale continued to decline as builders continue to scale back production. New home inventory declined to 425,000 which is the lowest it has been since November 2004. In June, median new home prices rebounded from their lowest levels since December to $230,900.

Annualized sales of total existing homes in June declined after posting its first monthly increase since February last month. Sales declined 2.6% from May levels to 4,860,000 units. Sales of existing homes are down 15.5% from the 5.75 million units in June 2007. Median existing home prices in June increased for the fourth straight month to $215,100 from a revised $207,900 in May. This is the highest median existing home prices have been since August 2007. The number of existing homes for sale increased a slight 0.18% to 4.49 million units. At the current sales pace, there are 11.1 months of existing homes supply on the market. Existing home affordability declined for the fourth straight month due to increases in both mortgage rates and existing home prices in June.

National average mortgage rates declined to 6.52% in the latest Primary Mortgage Market Survey released weekly by Freddie Mac on July 31st. Rates had been at their highest levels since August 2007 in the previous week. In the week ending July 25th, the MBA’s seasonally-adjusted Purchase Index declined to 309.5 from 335.6 in the previous week. This is the third straight week that the purchase index has declined and the lowest it has been since February 2003. The latest figure reflects a 7.78 percent decrease from last week and a 25.71 percent drop from the same period last year.