July 22 - Despite a surprise pullback in existing home sales- homes sold faster and for more money in June - proof the housing industry continued to improve before a spike in interest rates. Bobbi Rebell reports.
The housing recovery is still humming along. Yes- existing home sales fell in June- but that followed two months of big increases. And prices surged to a five-year high- to an average of more than $214,000. And homes are selling faster. Now on the market just 37 days on average- compared to 70 a year ago, that's the fewest since the National Association of Realtors started keeping track a couple of years ago. And inventories, while up a bit- are still tight enough to create some good old fashioned home buying drama. Trulia Chief Economist Jed Kolko: SOUNDBITE: JED KOLKO, CHIEF ECONOMIST, TRULIA (ENGLISH) SAYING: "It's a stressful time for buyers. Even though prices are actually quite low by historical standards and mortgage rates are still low by historical standards there is not a lot to choose from and so for buyers who are looking for something specific they may not be able to find what they want." And as time goes by- higher rates may become more of a factor when buyers are doing the math on whether they can afford that dream home- if and when it does come on the market. Mizuho Securities Steven Ricchiuto: SOUNDBITE: STEVEN RICCHIUTO, U.S. CHIEF ECONOMIST, MIZUHO SECURITIES (ENGLISH) SAYING: "The backup in interest rates that you have here- some people would say oh that's trivial! What is it $50, $75 in the monthly mortgage rates for $100,000. And the reality is, that probably is true when your income is rising, but if your income is stagnant, prices are up double digit, mortgage rates go up. You get squeezed." But the reality is that the June existing homes sales largely reflect mortgage rates locked in around April - before the spike up, and so the full effect has most likely not yet been felt.