July 25, 2008 in Business

Home sales down sharply

Median sales price posts fifth-largest decline on record
Associated Press photo

A foreclosure sign is seen in front of a house in Shaker Heights, Ohio, on Thursday. Sales of existing homes fell more sharply than expected in June as the housing industry continued to be bruised by the worst slump in more than two decades.
(Full-size photo)

Mortgage rates up

 Mortgage rates shot up this week with 30-year mortgages climbing to the highest level in nearly a year, reflecting concerns in financial markets about the troubles at corporate giants Fannie Mae and Freddie Mac.

 Freddie Mac reported Thursday that its nationwide survey showed rates on 30-year mortgages surged to 6.63 percent this week, up sharply from 6.26 percent last week. That represented the highest level for 30-year mortgages since they stood at 6.68 percent the week of Aug. 1.

 Rates on 15-year fixed-rate mortgages, a popular option for refinancing, rose to 6.18 percent, up from 5.78 percent last week.

 Rates on five-year adjustable-rate mortgages rose to 6.16 percent, up from 5.80 percent last week, while rates on one-year ARMs jumped to 5.49 percent, compared to 5.10 percent last week.

WASHINGTON – Sales of existing homes fell more sharply than expected in June as the housing industry continued to be bruised by the worst slump in more than two decades.

The National Association of Realtors reported that sales dropped by 2.6 percent last month to a seasonally adjusted annual rate of 4.86 million units. That was more than double the decline that had been expected and left sales 15.5 percent below where they were a year ago.

The downward slide in sales depressed prices, too. The median price for a home sold in June dropped to $215,100, down by 6.1 percent from a year ago. That was the fifth largest year-over-year price drop on record.

In contrast, homes sales and prices in Spokane County increased in June from the previous month, although closed sales were down 26 percent from June 2007. In Kootenai County, home sales in the first six months of the year were down 24 percent over the same period last year.

Nationally the drop in sales in June pushed inventories of unsold single-family homes and condominiums to 4.49 million units, up by 0.2 percent. That represented an 11.1-month supply at the June sales pace, the second highest level in the past 24 years.

Sales of existing homes dropped in all regions of the country in June except the West, which posted a 1 percent sales increase. Sales fell by 6.6 percent in the Northeast, 3.4 percent in the Midwest and 3.1 percent in the South.

Analysts said that until the inventory level is reduced to more normal levels, the slump in housing is likely to persist.

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