Home sales soared 11 percent in June, the third consecutive month of recovery for the housing industry, signaling that we likely hit the bottom of the housing market in the first quarter of this year. To be sure, the market remains depressed and distressed: Sales are still 21% below the 2008 levels, and more than three times below their 2005 highs. But today's housing news is almost all positive. Let's count down three happy things to take away from this:
1) "It would take 8.8 months to sell all the homes on the market as of June, compared with 10.2 months as of May. That is the lowest sales rate since October 2007." - Washington Post
2) "An index of builder confidence from the National Association of Home Builders (NAHB) rose to 17 this month after languishing in single-digit territory." - CNN
3) Sales of new homes unexpectedly rose 11 percent, which is perhaps the best indication that the housing market has reached its bottom.
And a dark cloud: "Distressed" home sales -- from foreclosure resales and short sales -- accounted for 31 percent of June home purchases. As a result, new home sales are still having a hard time competing with those depressed prices, even as the median price for a new home is down 12.0% from June 2008. The sales ratio of existing home sales to new is closing, but the sharp increase and small correction (drawn by Calculated Risk) helps to trace what happened to our housing market: