We have received more good news on the housing market this past week beginning with Last Friday’s report from the National Association of Realtors’ report on July existing home sales which showed a jump of 7.2% over June and up 5% from July of 2008. It was the biggest month-over-month increase in existing home sales since NAR began tracking the statistic in 1999.
On Tuesday, the S&P/Case-Shiller Home Price Index showed home prices increased 2.9% in the three months ending June 30th. This was the first quarter-over-quarter increase in three years providing further evidence that the housing market has since bottomed and is on the road to recovery. Late breaking news on new home sales came in this morning which showed a jump of 9.6% in July, the highest level since September 2008.
Mortgage rates have stayed in a range over the past week with only mild daily fluctuations in contrast to the increased volatility we had seen in the week prior. The Fannie Mae/ Freddie Mac conforming fixed-rate for single-family purchases stands at 5.375% with no points and the fifteen year stands at 4.625%. Rates have been helped by tame inflation reports and a well received government bond auction last week.
Rates have even managed to brush off a better than expected 4.9% increase in durable goods orders reported today with bonds actually a hair higher after the report. I expect rates will remain in their current range over the next week as they have for the past month or so. In the longer term, we will have to see if there are further signs of an improving economy and, if so, will those signs be strong enough to bring some inflationary fears back into the market. So far all indications are that though we are in the beginnings of a recovery, it will be very slow and take some time to fully rebound.