July Existing Home Sales, 85% of the housing market and a measure of actual closings, totaled 5.24mm annualized, 240k more than expected and the highest since Aug ’07. The inventory to sales ratio though remained unchanged at 9.4 months because the improvement in single family homes to 8.6 from 8.9 was offset by a spike in condos/co-ops to 15.1 from 13.1. The total number of homes rose to the highest level since Nov ’08 too. The average 30 year mortgage rate in July was 5.37% according to bankrate.com, down from 5.48% in June. The NAR said 30% of homes bought were first time buyers, many of which took advantage of the $8000 tax credit which expires on Nov 30th. Distressed home sales totaled 31%, about in line with the June tally. Prices were down 15.1% y/o/y and both single family and condos/co-ops saw a drop sequentially. Sales rose in every region except the West m/o/m. Bottom line, there is no question that the housing market is showing continued signs of bottoming but this is the busy season and the $8000 credit has been a big help to the lower end of the housing market. The question now, based on the Q2 delinquency data yesterday, is what happens to the prime area of the market looking out over the next few quarters.
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