Existing home sales are 15.2% higher than the same time last year!

Existing home sales are 15.2% higher than the same time last year!

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 don’t 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 aren't staying on the market very long at all, at 37 days in June versus 41 days in May. 

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 .7% in the month of May and that prices overall are 7.3% higher than a year ago.  This is a country wide 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%.

JJ Mack
916-517-1800
jj.mack@apmortgage.com
www.apmcroseville.com

The unemployment rate is dropping!!

The unemployment rate is dropping!!

The first 3 days of this week the stock market has seen modest movements in the indices.  Trading volume is lighter than normal as many investors have taken the entire week off. In addition to the markets being closed on Thursday for the July 4^th holiday, there was not a lot of economic data released this week for the traders that stuck around to trade on.

The most significant report for the holiday week will be released on Friday at 8:30AM.  Friday’s release of the national unemployment rate is always a significant report however analysts are not expecting any major changes in the employment situation.  The expectation for May’s report is that there was an addition of 175,000 non-farm jobs.  The unemployment rates is expected to remain the same at 7.5%.  The ADP report released on Wednesday showed significant month-to-month improvement in the job sector with an estimated increase in private payrolls of 188,000 for June.

First time jobless claims are trending lower but only very gradually. Initial claims for the week of June 29^th fell 5,000 to 343,000 which is just below analyst expectations of 345,000. The 4-week moving average is also down slightly to 345,500 which is several thousand below where were a month ago.

Outside of the lack of significant economic data this week, the biggest news is that our elected officials fighting again.  The Republicans are upset about the Obama administration’s decision to delay a major portion of the implementation of the Health Care Reform Act until 2015. 

The battle that is heating up in Congress is that the Republicans are stating that the President does not have the authority to delay implementation of a law passed by Congress.  The irony is that the Republicans never wanted the law to begin with and now they are upset because it is being delayed without what they feel is proper authority.  For people like me just sitting on the sidelines watching this battle unfold I can’t help but think that our elected officials will argue about anything and everything.

Yesterday being Independence Day makes me wonder if this behavior is what our founding fathers had in mind for how our government should work?

JJ Mack
916-517-1800
jj.mack@apmortgage.com
www.apmcroseville.com