Existing Home Sales Rise More Than Expected

Solar power housing residential developmentREUTERS/Yuriko NakaoSolar powered houses are pictured in Ota, 80km northwest of Tokyo, October 28, 2008

Existing home sales climbed 2.6% in June to an annualized rate of 5.04 million.

Economists were expecting sales to rise 1.9% to 4.99 million.

“Inventories are at their highest level in over a year and price gains have slowed to much more welcoming levels in many parts of the country,” said Lawrence Yun of the National Association of Realtors. “This bodes well for rising home sales in the upcoming months as consumers are provided with more choices. On the contrary, new home construction needs to rise by at least 50 per cent for a complete return to a balanced market because supply shortages — particularly in the West — are still putting upward pressure on prices.”

The median existing-home price was $US223,300, up 4.3% from a year ago. The NAR notes that this is the 28th consecutive rise in prices.

“Access to affordable credit continues to hamper young, prospective first-time buyers,” said the NAR’s Steve Brown. “NAR recommends that FHA reduce high annual mortgage insurance premiums for all qualified homebuyers and eliminate the insurance requirement for the life of the loan. FHA’s HAWK program is a good start, but it should offer further reductions for participating home buyers.”

During the period, the national aveerage rate for the 30-year, conventional, fixed-rate mortgage was 4.16%, down from 4.19 in May.

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