Home prices push higher. Median home prices at record highs. Higher shares of Google lifts Stocks.

A shortage of homes for sale on the market continued to drive home prices higher in May, reports the Federal Housing Finance Agency (FHFA). The FHFA’s House Price Index (HPI) rose 0.2% in May from April, +6.4% from May 2017 to May 2018. The FHFA monthly HPI is calculated using home sales price information from mortgages sold to or guaranteed by Fannie Mae and Freddie Mac.

RE/MAX reports that home prices surged in June to a fresh record high, while inventories shrank. The national median home sale price in June was $258,500, a new record for the nine years that RE/MAX has tracked the housing market. As far as the amount of homes for sale on the market, 42 of the 54 metro areas reported a decline to a 2.7-month supply, an 8.8% drop from a year earlier and the lowest inventory number ever recorded for June. “Lack of inventory has become a theme for the year,” said RE/MAX CEO Adam Contos. “Having fewer homes to choose from poses a challenge for buyers, who need to be ready to act decisively and quickly.”

U.S. Stocks are rallying in response to a strong corporate earnings season. Google reported better-than-expected earnings yesterday, which is lifting all Stocks and FAANG (Facebook, Apple, Amazon, Netflix, Google) shares this morning. Of the 90 companies in the S&P 500 that have reported earnings so far, 82% have exceeded expectations. The U.S. economy is humming. In addition, Consumer Confidence is near all-time highs while small business optimism is at peak levels.