Last month I said that I expected to see some elevated numbers in the existing home sales report for May and June since this report would reflect the actual closing of the home purchases from buyers that raced to buy before the April 30th home-buyer tax credit deadline. Even though Congress has extended the deadline to close on these purchases until August 31st, the majority of the tax-credit induced sales will have closed by June 30th and therefore be reflected in today’s report which I would say has happened.

Today’s existing home sales report from theNational Association of REALTORS(R) shows existing home sales in June were at at a seasonally adjusted-annual rate of 5.37 million units which is a decline of 5.1 percent from May but is 9.8 percent higher than a year ago..

Prices on the rise for fourth consecutive month –

The median home price in the U.S. in June was $183,700 an increase of 5.2 percent from May and an increase of 1.0 percent from a year ago when the median price was $181,800.

Inventory levels increase-

Inventories decreased in May after being on the rise three consecutive months but were back on the rise again in June as the number of existing homes for sale in June finally increased to 3,992,000, an increase of 2.5 percent from May and an increase of 4.7 percent from a year ago. The number of months “supply” this inventory represented in June, based upon current sales levels, increased to 8.9 months making it the highest level since August 2009.

Metro Home Sales and Prices –

NAR publishes existing home sales for 20 major metropolitan areas of the U.S. Highlights from that report include:

• Pittsburgh, PA pushed Portland out of the first spot where it reigned for three months with the largest year-over-year increase in existing home sales in June with Pittsburgh seeing an increase of 23.9 percent in sales from a year ago.
  • Boston, Massachusetts spent it’s second month at number two for June with a 23.7 percent increase in existing home sales from a year ago.
  • New York, NY was number three with a 21.0 percent increase in existing home sales from a year ago.
• St. Louis led the way in price increases from a year ago, with June’s median home price of $161,500 representing a 9.9 percent increase from a year ago when the median price was $146,900.
  • San Diego, CA came in second for the second consecutive month with a median price of $397,600, a 8.4 percent increase from a year ago when it was $366,900.
  • Boston, MA came in third with a median price of $391,600, a 8.2 percent increases from a year ago when it was $361,800.

Lawrence Yun, NAR chief economist,said the market shows uncharacteristic yet understandable swings as buyers responded to the tax credits. “June home sales still reflect a tax credit impact with some sales not closed due to delays, which will show up in the next two months,” he said. “Broadly speaking, sales closed after the home buyer tax credit will be significantly lower compared to the credit-induced spring surge. Only when jobs are created at a sufficient pace will home sales return to sustainable healthy levels.” (hey, I’ve been saying this for months :)

I don’t like “seasonally adjusted rates of sales”:

If you have been reading my posts for a while you know by now I don’t like “seasonally adjusted” numbers when artificial stimuli, such as homebuyer tax-credits, can cause an unseasonal spike in sales activity. I much prefer to see the actual numbers and try to garner from them what is going on in the housing market.

The following are the ACTUAL Existing Home sales reported by NAR without any adjustment or fluff:

• There were 564,000 existing homes sold in June which is a 7.2 percent increase from May and a 8.3 percent increase from a year ago.
• Below are highlights from each region:
  • Northeast – 103,000 homes sold in June, a whopping increase of 30.4 percent from May and an increase of 14.4 percent from the year before.
  • Midwest – 131,000 homes sold in June, an increase of 0.8 percent from May and an increase of 9.2 percent from the year before.
  • South – 206,000 homes sold in June, an increase of 5.6 percent from May and an increase of 9.0 percent from the year before.
  • West – 124,000 homes sold in June, an increase of 1.6 percent from May and a increase of 1.6 percent from the year before.

Other highlights of the NAR Report:

• Distressed sales accounted for 32 percent of all home sales in June, up from 31 percent in May.
• First-Time homebuyers accounted for 43 percent of the home sales in June, down from 46 percent in May.
• Investors were the buyers of 13 percent of the homes in June, down from 14 percent in May.
• Repeat home buyers were responsible for approximately 44 percent of June’s sales up from 40 percent in May.

My Take On the Numbers:

We have clearly seen a boost to the housing market as a result of the home-buyer tax credit and continue to get a little support as the deals close. Unfortunately the economy still has major issues….Fannie Mae’s housing forecast in June took a sharp turn downward (which I will be writing about in the next day), unemployment increased today and there is still much political unrest in the country. I think the best we can hope for at this point is for some stabilization in the housing market which we are seeing some glimpses of. It will be quite a while before I will be using the “R” word though (recovery).