NAR reported that existing home sales increased 2.0% in May

The NAR reported that existing home sales, including single-family, townhomes, condos and co-ops, increased 2.0% in May to a seasonally adjusted annual rate of 4.99 million units. Sales remain 15.9% below the 5.93 million-unit pace in May of last year. The Association believes that better-than-expected sales last month were a result of buyers wading back into the market because of recent price declines and more affordable mortgage products. Regionally, sales rose in all areas by varying degrees except for the South where they declined 0.5%. Stronger sales activity resulted in a slight decline in inventory levels. The inventory of homes on the market fell 1.4% to 4.49 million which represents a 10.8 month-supply at the current sales pace. Prices continued to decline amid rising foreclosures and short sales. The median price for an existing hom e nationwide fell 6.3% over the last year to $208,600 as average prices declined 6.5% to $253,100. The improvement in home sales is welcomed; however, the housing market remains weak as evidenced by sky-high inventories and declining sales prices. Weakness is expected to continue going forward.

Jobless claims were unchanged at a level of 384k for the week ending June 21. Claims remain elevated indicating sluggish labor market conditions at best. Expect the employment report for June, due out next Thursday to probably showing a larger decline in payrolls than in May.

The final revision to Q1 GDP showed the economy grew at a 1.0% rate, as expected. Economy-wide inflation increased slightly to 2.7% from 2.6% in the previous estimates. The data released so far in April and May suggest that Q2 growth will continue to be very soft. John Cherry LANDAMERICA VALUATION CORPORATION Parkview One 925 North Point Parkway, Suite 400 Alpharetta, GA 30005 Toll Free: 800.207.7959 Fax: 770.777.6036