Uptick for Minn. housing as U.S. sales and mortgage rates drop
MINNEAPOLIS (AP) -- A new report shows slight improvement in Minnesota's housing market.
The Minnesota Association of Realtors says housing sales were up about 5 percent last month compared with June 2011. Pending sales climbed 12 percent in the same time frame.
The association's report shows the median sale price of a home in Minnesota is nearly $160,000 -- up 10.4 percent from June of last year. And homes are selling for closer to their original list price. Last month homes sold for nearly 94 percent of original list price, an increase of 3.5 percent compared with last year.
WCCO-TV reports new home listings in June declined more than 16 percent compared with the same time last year.
US SALES FELL IN JUNE
Nationally, the numbers were not as encouraging. Americans bought fewer homes in June than May, suggesting the weak economy could be slowing a modest housing recovery.
The National Association of Realtors says sales of previously occupied homes fell 5.4 percent in June to a seasonally adjusted annual rate of 4.37 million homes. That's the fewest since October.
Sales are up 4.5 percent from a year ago, evidence that the market is still recovering. But the annual sales pace is below the 6 million that economists consider healthy.
The number of first-time buyers, critical to a housing recovery, made up just 32 percent of sales. That's down from 34 percent in May. In healthy markets, first-time buyers make up more than 40 percent of the market.
MORTGAGE RATES FALL AGAIN
As sales dropped, so did mortgage rates. Average rates on fixed mortgages fell again to record lows, creating more incentive for buyers to enter the recovering housing market.
Mortgage buyer Freddie Mac says the average rate on the 30-year loan fell to 3.53 percent. That's down from 3.56 percent last week and the lowest since long-term mortgages began in the 1950s.
The average rate on the 15-year mortgage, a popular refinancing option, declined to 2.83 percent, below last week's previous record of 2.86 percent.
The rate on the 30-year loan has fallen to or matched record low levels in 12 of the past 13 weeks.
Cheaper mortgages have contributed to a modest housing recovery. Home sales fell in June but were up from the same month last year. Home prices are rising in most markets.
NEW HOUSING STARTS BEST IN 4 YEARS
The falling sales and mortgage rates closely followed Wednesday's news about a rise in construction starts.
U.S. builders broke ground on the most new homes and apartments in nearly four years last month, driven by a jump in single-family home construction. The increase is the latest evidence of a slow housing recovery.
The Commerce Department said Wednesday that housing starts rose 6.9 percent in June to a seasonally adjusted annual rate of 760,000. That's the highest since October 2008. Construction of apartments also rose after falling in May. The number of permits to build homes fell 3.7 percent to 755,000, down from May's three-and-a-half-year high. Permits for apartments fell, while permits for single-family homes edged up to the highest level since March 2010. Despite the gains, the level of housing starts and permits are roughly half what economists consider healthy.