Existing home sales fell 1.5% in May as housing starts declined 4.8% and building permits rose 7.9%. The FOMC held constant its federal funds target rate and announced an extension of “operation twist.” Initial jobless claims edged down 2,000 to a level of 387,000 for the week ended 6/16.

• Existing home sales were down 1.5% to an annual pace of 4.55 million units in May. Sales were 9.6% above their May 2011 pace. The median home price was up 7.9% from a year ago, to a level of $182,600. Distressed sales (foreclosures and short sales) accounted for 25% of May sales, down from 28% in April and 31% a year ago.

• Housing starts were down more than expected in May, with a 4.8% decline to an annual pace of 708,000 units.

• Building permits unexpectedly shot up 7.9% to an annual rate of 780,000 units in May.

• The FOMC held constant its target for the federal funds rate at 0.0%-0.25% and announced that it will extend its “operation twist” program, adding another $267 billion in exchanges of short-term Treasuries for longer-term Treasuries through the end of this year. The original $400 billion “operation twist” had been scheduled to end this month.

• Initial jobless claims edged down 2,000 to a level of 387,000 for the week ended June 16th.