Here we go… June home resale numbers are UP AGAIN… 3rd month in a row sales are up… Prices up 4% month over month from May… Inventory dropped again. This is the first time we've seen sales gains like this since 2004 and the highest sales level since October 2008… and all spurred by tax incentives, lower borrowing costs, foreclosure-driven declines in prices and affordability levels not seen since the 1970's.
This is exactly what past housing reports have been showing us (Pending Home Sales Up 4th Month; Housing Bottom is Here). If you have been waiting for signs of a bottom, it doesn't get any clearer than this folks. And if you are ready to take advantage of the best real estate buying market in 30 years… where you can buy low from motivated banks and owners and sell quickly to eager first time homebuyers… then you must join me this Wednesday in my FREE New Foreclosure Investor Webinar at 6pm PDT (9pm EST)… REGISTER HERE.
The gain in sales confirms Federal Reserve Chairman Ben S. Bernanke’s remarks this week that the worst housing slump in eight decades appears to be moderating. “We have finally bottomed out,” said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh. Improved affordability “is stalemating the drag from higher unemployment.”
According to the National Association of Realtors, existing home sales reached a 4.49 million pace in January, their lowest level since comparable records began in 1999. The median price reached a six-year low the same month, extending the decline from July 2006’s record to 28 percent.
Existing-home sales increased 3.6 percent to a seasonally adjusted annual rate of 4.89 million units in June from a downwardly revised pace of 4.72 million in May, but are 0.2 percent lower than the 4.90 million-unit level in June 2008.
Lawrence Yun, NAR chief economist, is hopeful about the gain. “The increase in existing-home sales occurred in all major regions of the country,” he said. “We expect a gradual uptrend in sales to continue due to tax credit incentives and historically high affordability conditions.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 5.42 percent in June from 4.86 percent in May; the rate was 6.32 percent in June 2008. Mortgage interest rates have trended lower in recent weeks.
Total housing inventory at the end of June fell 0.7 percent to 3.82 million existing homes available for sale, which represents a 9.4-month supply at the current sales pace, down from a 9.8-month supply in May. Raw inventory totals are 14.9 percent below a year ago.
“This is another hopeful sign – if we can keep the volume of sales above the level of new inventory, prices could stabilize in many areas around the end of the year,” Yun said.
An NAR practitioner survey in June showed first-time buyers accounted for 29 percent of transactions, unchanged from May, and that the number of buyers looking at homes is up nearly 12 percentage points from June 2008.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said there are very good opportunities. “Despite some of the challenges, the housing market continues to demonstrate signs of recovery,” he said. “The temporary first-time buyer tax credit is clearly helping people make a decision and is contributing to the overall stimulus impact.”
The national median existing-home price3 for all housing types was $181,800 in June, which is 15.4 percent below June 2008. Distressed properties, which accounted for 31 percent of sales in June, continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes.
Regional Breakdown:
Northeast rose 2.5 percent to an annual pace of 820,000 in June.
Midwest rose 0.9 percent in June to a level of 1.10 million.
South rose 4.0 percent to an annual pace of 1.81 million.
West rose 6.4 percent to an annual rate of 1.16 million in June and are 11.5 percent higher than June 2008.
The results of the Existing Home Resales report and the many 'better than expected' second quarter earnings reports now coming in has ignited a stock market rally that drove the S&P 500 index to its highest level in 2009 and the Dow industrials is now above 9,000 points for the first time since January.
"The economy does look like it's gradually recovering after a very deep recession. Consistent with the macroeconomic data, we are seeing evidence of a recovery in some corporate earnings results … (though) part of the improvement is coming in the form of lower costs," said Zach Pandl, economist at Nomura Securities International in New York. "We're slowly turning the corner and it looks like the market is responding to that."
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