Existing home sales fell more than 1% in June as the supply of homes for sale remained tight. Sales fell to a seasonally adjusted annual rate of 5.08 million. Economists expected an annual pace of 5.27 million, according to a Bloomberg survey.
Tim Mullaney and Julie Schmit
11:35 a.m. EDT July 22, 2013
Existing home sales fell more than 1% in June as the supply of homes for sale remained tight and short-sales and purchases of foreclosed homes dropped.
Sales fell to a seasonally adjusted annual rate of 5.08 million, the National Association of Realtors reported Monday. Economists had expected an annual pace of 5.27 million, according to a Bloomberg survey.
May's annual sales rate was revised lower, to 5.14 million from 5.18 million.
Economists said the report was solid, the latest in a series depicting a housing market in recovery from a post-2006 bust that wiped out more than $7 trillion in home equity and led to millions of foreclosures.
Distressed sales accounted for 15% of June's overall sales, down from 18% in May and the lowest share since October 2008, the Realtors' reported.
``Although sales were down a bit, don't panic: the drop was all in distressed sales,'' said Jed Kolko, chief economist for real-estate site Trulia.com. Non-distressed "sales rose month-over-month and are up 32% year-over-year. Plus, good news for buyers: inventory expanded for the fifth month in a row. ... More inventory means home price gains should slow down.''
The report doesn't shed any light on whether higher mortgage rates are hurting sales, Moody's Analytics economist Celia Chen said. The June report reflects sales contracts that were agreed to before rates began rising, and took several weeks to close, she said.
``I'm not changing my forecast that sales are trending up,'' Chen added. ``The drivers are in good shape. Job growth has been about 200,000 a month and housing is very affordable.''
Housing inventory rose to 5.2 months at last month's sales rate, up from 5 months in May, but listed inventory is 7.6% below a year ago, the Realtors association said.
The national median existing home price was $214,200 in June, up 13.5% from June 2012.
Data on new home sales in June will be released Wednesday.
Interest rates are likely to have some impact on future home sales — either by enticing buyers who fear higher rates ahead or making home ownership too expensive for some.
The average 30-year fixed rate had been stabilizing around 3.5% since the beginning of the year until it topped the 4% mark recently for the first time in more than 18 months. The average 30-year-fixed rate mortgage was 4.37% for the week ended July 18, Freddie Mac said.
The tight supply of homes for sale is also expected to continue to affect price appreciation and home sales.
A low inventory of homes on the market has driven up prices in many markets. CoreLogic says prices were up 12.2% in May year over year. It forecast a 13.2% year-over-year jump for June.
As prices rise, more homeowners are likely to try to sell their homes. That's already occurring in some hot real estate markets, including parts of California.
In June, the state's inventory of single-family homes for sale edged up to a 2.9-month supply from 2.6 months in May.
Realtors consider a six to seven month supply to be a balanced market between buyers and sellers.
While low inventory helps prices, it will continue to put downward pressure on existing home sale volumes, says Svenja Gudell, Zillow senior economist. She expects more normal inventory levels of homes for sale in the second half of this year.
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