June home sales slide, inventory swells
Sales of existing U.S. homes in June fell to a seasonally adjusted annual rate of 4.86 million units, down 2.6 percent from May’s pace of 4.99 million and down 15.5 percent from the 5.75 million-unit rate a year ago, the National Association of Realtors reports today.
At the end of June, total housing inventory — comprised of single-family, townhomes, condos and co-ops — grew to an 11.1-month supply, or 4.49 million existing units for sale, based on the current sales pace. This represents a 0.2 percent gain from the end of May when there was a 10.8-month supply.
Nationwide, the median existing-home price for all housing types was $215,100 in June, down 6.1 percent from a year ago when the median was $229,000. The year-over-year median price declined steepest in the West, down 17.2 percent to $288,400, followed by a 12.6 percent drop to $256,700 in the Northeast and a 2.4 percent dip to $185,300 in the South. The median price in the Midwest rose 2.8 percent during the period to $175,300.
Weak market, inflation fears push rates higher
Freddie Mac’s Primary Mortgage Market Survey released today showed an average 38-basis-point jump in interest rates on long-term loans this week as market concerns persisted.
Average rates on 30- and 15-year fixed-rate mortgages hit 6.63 percent and 6.18 percent, respectively, compared with 6.26 percent and 5.78 percent a week ago. Points that borrowers paid to attain these rates this week averaged 0.6.
A year ago, average rates on 30- and 15-year loans were 6.69 percent and 6.37 percent, respectively.
"Market concerns about rising inflation, further weakness in the housing market and greater probability that the Federal Reserve (Fed) will raise short-term rates this year all combined to push mortgage rates higher this week," said Frank Nothaft, Freddie Mac vice president and chief economist, in a prepared statement. "Some of the key drivers to these concerns were consumer prices jumping 1.1 percent (annualized) in June — the largest increase since September 2005 on a year-over-year basis — coupled with consumer prices growing at a 5 percent clip (on a year-over-year basis), the strongest since February 1991."
Higher interest rates impede purchases, refis
Mortgage application volume sank last week as interest rates on long-term loans gained an average of 36 basis points, the Mortgage Bankers Association reported Wednesday. The Market Composite Index, a measure of application volume, fell to 489.6 last week, a decrease of 6.2 percent on a seasonally adjusted basis from 522.2 one week earlier. The refinance and purchase index components were down 5.6 percent and 6.7 percent, respectively.
For 30-year fixed-rate mortgages, the average contract interest rate jumped from 6.22 percent to 6.59 percent between July 11 and July 18; the average rate on 15-year loans climbed from 5.74 percent to 6.1 percent. Rates on the one-year adjustable-rate mortgage (ARM) held at 7.16 percent. The points that borrowers paid to attain these points fell across all loan types, to 1.05 on 30-year loans, 1.11 on 15-year loans, and 0.29 on one-year ARMs.
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