Hotter Than A Pistol

Given that summertime is by far the biggest part of the year for home sales, this kind of volume is not particularly unexpected. We'll know a lot more come September and October. AP (07.25.05):

"Sales of existing homes set a record in June with home prices shooting up at the fastest pace in nearly 25 years. The torrid sales pace helped to push the median price of an existing home up to a record of $219,000 last month, a gain of 14.7 percent from the median, or midpoint, for prices a year ago. That was the biggest jump in prices since November 1980." Existing Home Sales Set Record in June

Here's some stats existing home salse since 2002, nationwide and by region. Some context: the median sales price for a new home fell last month to $217,000. Also, "mortgage rates have risen in the past three weeks, according to a national survey by mortgage giant Freddie Mac." Sigh. Always the naysayers!! What they're fretting about "is that housing prices are rising at a pace that is unsustainable and that in some parts of the country could start declining if rising interest rates begin to weaken demand." Well, so what? "Such a development could spell trouble for homeowners who find the value of their homes falling below the value of the mortgage they obtained to finance the purchase." Lenders tend to start getting nervous if the value of the collateral falls to less than the amount of the loan. Very nervous. Especially if they have a lot of loans where this is happening.