Home Sales on the Rise - have you bought your vacation home yet?

Existing Home Sales Rise By Lisa Diesel With a bailout deal in place, the situation in Greece had little influence on mortgage rates over the past week, and the level of daily volatility declined significantly. The economic data released over the past week also did not have much impact and mortgage rates ended a little lower.  The housing data released this week was encouraging. June existing home sales increased 3% from May to the highest level since Feb 2007 and they were 10% higher than a year ago. Strong demand and limited inventory continued to push prices higher and the median existing home price reached an all-time high. Total housing inventory did increase slightly in June, but it remains low by historical standards. Existing home sales account for roughly 90% of all single-family home purchases.  The most recent reading for the Consumer Price Index (CPI) showed that core inflation continued to hold steady. June Core CPI, which excludes the volatile food and energy components, was 1.8% higher than a year ago. Core CPI has remained close to this level for more than two years. The Fed’s target for core inflation is 2.0%. Since mortgage rates are heavily influenced by inflation rates, these tame readings have helped keep mortgage rates low.  Looking ahead, the next Fed meeting will take place on July 29. Investors will be looking for information about the timing of the first federal funds rate hike. Before that, New Home Sales will be released on July 24. Durable Orders, an important indicator of economic activity, will come out on July 27. Pending Home Sales will be released on July 29.  Commentary provided by MBSQuoteline. For live MBS pricing visit www.mbsquoteline.com.