Drop in Home Sales May Overstate Weakness
Existing home sales dropped to a 4.37 million unit rate in June, down from a 4.62 million rate in May. Sales were revised up slightly in May, which blunts the blow. A shortfall in the inventory of foreclosures and short sales on the market are the primary reasons that realtors blame for the drop...
The median price of an existing home rose to $189,400 in June, up almost 8% from a year ago. This increase was mostly because of the mix of sales...
That said, structural problems in the mortgage market – title problems, capacity constraints, high down payments, a shortfall in demand for mortgage-backed securities (MBS), which limits the ability of banks to remove risks associated with underwriting mortgages on the market – will continue to constrain sales relative to demand...
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