Housing Market
National average mortgage rates increased slightly to 6.37% in the latest Primary Mortgage Market Survey released weekly by Freddie Mac on July 10th. Rates have now posted weekly increases in six out of the past seven weeks. In the week ending July 4th, the MBA's seasonally-adjusted Purchase Index increased to 365.8 from 342.8 in the previous week. This is the second straight week that purchase applications have increased while reaching their highest levels in a month. The latest figure reflects a 6.71 percent increase from last week but a 19.41 percent drop from the same period last year.
New and existing home sales moved in opposite directions again in May but it was the existing home market that showed improvement while new home sales faltered. New home sales declined in May after posting its first monthly gain since October 2007 last month. Sales fell 2.5% in May to a seasonally-adjusted 512,000 homes, down from a revised April figure of 525,000. At the current sales pace, there are 10.9 months of new homes supply on the market. New home inventory declined to 450,000 which is the lowest it has been since May 2005. In May, median new home prices fell back to their lowest levels since March to $231,000 after posting a strong rebound in the previous month. Lower prices helped to increase the new home affordability ratio to 48.8% in May.
Annualized sales of total existing homes in May increased for the first time since February, rising 2.0% from April levels to 4,990,000 units. Sales of existing homes are still down 15.9% from the 5.93 million units in May 2007. Median existing home prices in May increased for the third straight month to $208,600 from a revised $201,200 in April. This is the highest median existing home prices have been since November 2007. The number of existing homes for sale declined 1.4% to 4.485 million units in May. At the current sales pace, there are 10.8 months of existing homes supply on the market. Existing home affordability declined for the third straight month due to increases in both mortgage rates and existing home prices in May.
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