Recent housing market reports tell conflicting stories and the next S&P/Case-Shiller release on prices will help sort out the mixed signals. Existing home sales were 5.39 million at annual rates in July, up from June’s revised level of 5.06 for a solid gain. New homes sales told the opposite story with a 13.4% plunge to 394,000. Inventories for both series remain tight at a little more than five month’s supply. One major concern is affordability with mortgage rates steadily climbing. Freddie Mac reports 30 year fixed rate loans are now at 4.58%. At the same time, mortgage applications continue to slide as they set a two year low.
The June S&P/Case-Shiller Home Price report will show where prices are in 20 key cities across the country. Last month the west and southwest were very strong with San Francisco showing the fastest increase. Phoenix and Las Vegas remained strong but may be fading a bit. The northeast was much softer with prices up only in low single digits.