The Federal Housing Finance Agency House Price Index was reported up 0.7% for May, a bit lower than expectations of 0.8%. Year-over-year, the House Price Index is up 7.3%. This was a good report, but it does not fully account for the recent rise in rates. We will be more interested to see what the next few months’ data shows.
New home sales for June were reported up 8.3% at 497,000. This is the best level in over 5 years. And this is especially impressive when considering this number is based on signed contracts in June, which incorporates a good deal of the bump up in mortgage rates. The median home price also jumped to $249,700, which is a 7.4% increase from last year. It’s no wonder why the recent builder sentiment number was so strong. Inventories remained very tight with a scant 3.9 months of supply. This suggests more pricing power and greater appreciation ahead.
