My Financial Healthcheck

Existing home sales rose in May, they were up 2.4% last month to 4.77 million seasonally units, April numbers were revised downward to 4.55 million units.  The lower interest rates were still around in May, I expect these numbers to be revised downward and that the trends will start turning negative as the higher interest rates and continuing job loses in the employment market.  The median home price in May fell 16.8% to $173,000 from last year, another reason first-time home buyers will remain just that, continuing to want a lower buying price and sitting on the fence.  If you read into the results, 50% of the sales are coming from sales of foreclosed homes, which drag down the values of surrounding homes.  Appraisals are becoming critical to both new home sales and the ability to refinance, many are falling short killing the deal.

New home sales fell unexpectedly (not to me) in May to an annual adjusted 342,000, down .06% from April, they were down 32.8% from a year ago.  Newly constructed homes can’t compete with the values found in the existing home market. The median sales price of a new home rose to $221,600 in May up 4% from April.

The NSP (National Stabilization Program)..another great sounding venture from Washington, basically they allowed with their loose regulations anyone with a pulse the ability to buy a home..and now are paying for it, or in reality we are paying for it through increased taxes.  The money will start to flow to states and local housing authorities and non-profit organizations who deal with providing housing for middle and low income families.  Now as usual with anything Washington does with a new program, expect a huge amount of the $6 billion that was approved last August and just now being given out be be wasted.  By regulation, the funds must be spent (wasted) in communities with the highest incidences of foreclosure and subprime loans (ones that should not of received loans in the first place). All the home sales using these funds must be used for primary residences (let’s see how they monitor that..right).  Just wait to see if Cap (CRAP) and Trade and National (IRRATIONAL) HealthCare pass as bills to see how inefficient government works just like this mortgage program.