Existing Home Sales
-4.77m annual rate for June, down from 7.08m 2005 peak
-Down 0.8% since May and down 8.8% since June 2010
-Median home price $184,300, up 0.8% from June 2010.
-Distressed homes accounted for 30% of June sales
-Inventory rose 3.3% to 3.77 million existing homes for sale
-This is a 9.5-month supply at the current sales pace
-All-cash transactions accounted for 29% of June sales
-Investors account for the bulk of cash purchases
-First-time buyers purchased 31% percent of homes in June
-Investors accounted for 19% of June purchases
-Rest of sales were to repeat buyers
Purchase Index Week/Week: -0.1%
Refinance Index Week/Week: +23.1%
Composite Index Week/Week: 15.5%
Even though we are at a strange time when a larger than normal Existing Home Sales take place for all cash, the downward move in the week-to-week Purchase Index for mortgage applications is an indicator that the housing market has a long way to go to recover. I do not subscribe to the notion that somehow people have permanently soured on homownership. Housing prices need to get back in line with incomes. The delay in foreclosures of long-delinquent mortgages is stretching out the time frame. CoreLogic’s most recent estimate of shadow inventory was 1,700,000 units.
Meanwhile the Weekly Composite Index from Consumer Metrics shows a significant upward trend.
This index is interesting because it uses data which, compared to most other releases, is nearly live. This graph is a composite index of ten sectors:
Automotive, Entertainment, Financial, Health, Household, Housing, Recreation, Retail, Technology, and Travel. The largest gain is retail.
This graph should be a reminder that it is the consumer who will lead economic recovery. Fiscal policy and monetary policy and all else happening in Washington means little.