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Home Sales Better Than Expected:

Average New Home Price Also Increases, Inventory Decreases.

Sales of new U.S. single family homes fell for the first time in three months in May, but inventories of new homes for sale reached record lows and the median sales price rose slightly, a government report showed on Thursday.

The Commerce Department said May new home sales fell 2.1 percent to a seasonally adjusted annual rate of 319,000. Analysts polled by Reuters were expecting a slightly slower pace of 310,000 for the month.
May’s new home sales were 13.5 percent above the May 2010 level.

The Commerce Department report showed that the median new home sales price rose to $222,600 in May from $217,000 in April, marking the first increase since December last year.
U.S. housing starts rose more than expected and permits for future construction touched a five month high in May, a government report showed on Thursday.

The Commerce Department said housing starts rose 3.5 percent to a seasonally adjusted annual rate of 560,000 units, retracing almost half of April’s steep decline. April’s starts were revised up to a 541,000 unit pace, which was previously reported as a 523,000 unit rate.
At May’s sales pace, the supply of homes on the market dropped to 6.2 months’ worth, the lowest since April 2010.

What Happened to Rates Last Week:
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Mortgage backed securities (MBS) gained +59 basis points last week which helped to move mortgage rates lower from last Friday to the prior Friday.  But it was a wild ride with MBS selling off and mortgage rates rising in the beginning of the week and then MBS reversed course for some big gains after the Federal Reserve lowered their economic growth forecasts and amid continued concerns that Greece would not be able to pay off their debt (even with bailout). 

What to Watch Out For This Week:

The following are the major economic reports that will hit the market this week.  They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages.  I will be watching these reports closely for you and let you know if there are any big surprises:

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It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets.  Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon. 

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Vince Reece
Senior Loan Officer
Office: 303-840-0966
Cell: 303-818-0699
vince@coloradomortgageguy.com
19519 E Parker Square Dr
Parker, CO 80134
www.coloradomortgageguy.com

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