Home Prices Hold Their Own As Existing Home Sales Fall

There was mixed news on the existing housing front in last month. The monthly survey by the National Association of Realtors (NAR) ® showed the sales of existing homes, including single-family houses, townhouses, condos, and co-ops declined 3.8 percent off of the pace in May to a seasonally adjusted annual rate of 5.75 million units. This is a decline of 11.4 percent from annualized June 2006 sales of 6.49 million units.

Still, prices rose modestly and inventories declined slightly. The national median existing home price for all housing types was $230,100 last month, up 0.3 percent from $229,300, the median one year earlier. The back-log of unsold homes also improved, falling 4.2 percent from May figures to 4.20 million units available for sale. Once the May figures were revised, the inventory remained at an 8.8 month supply even with slower sales.

"Home buyers have been getting mixed signals about the housing market, which is causing some of them to hesitate," Lawrence Yun, NAR senior economist, said. "Mortgage interest rates have risen recently, and tightening lending standards are continuing to hamper sales, but fewer risky loans will put the market on a healthier path. Although general buying conditions remain favorable for long-term home buyers, it appears some buyers are looking for more signs of stability before they have enough confidence to make an offer.

"Two bright spots in the June report are a decline in housing inventory and a modest gain in home prices," he said. "Although we've seen seasonal month-to-month price increases over the past four months, this is the first time in 11 months that the median home price is higher than the year-ago price."

Single family home sales declined 3.5 percent from May figures and are 12.1 percent below the 5.70 million-unit level in June 2006. The median existing single-family home price was $230,300 in June, up 0.1 percent from a year ago.

Existing condominium and co-op sales dropped 6.3 percent to a seasonally adjusted annual rate of 740,000 units in June from 790,000 in May, and are 6.6 percent lower than the 792,000-unit pace a year ago. The median existing condo price was $228,900 in June, up 2.6 percent from June 2006.

Existing-home sales in the South eased by 1.7 percent to an annual sales rate of 2.26 million in June, and are 11.4 percent below a year ago. The median price in that region was $190,800, up 0.7 percent from June 2006.

In the Midwest sales declined 2.8 percent in June to a level of 1.37 million, and are 8.1 percent below June 2006. The median price was $171,700, 1.5 percent below a year ago.

The West saw a drop of 6.8 percent to an annual pace of 1.10 million, 19.1 percent below a year ago. The median price in the West was $340,000, down 0.4 percent from June 2006.

Sales in the Northeast fell 7.3 percent to a level of 1.01 million in June, and are 7.3 percent lower than June 2006. The median existing-home price in the Northeast was $294,400, up 1.8 percent from a year ago.

The report of new home sales is due from the Census Bureau on today.