Sales of previously owned houses unexpectedly dropped in June, hurt by a lack of supply and rising mortgage rates that will slow the rebound in the U.S. real-estate market.
Purchases fell 1.2% to a 5.08 million annualized rate, the National Association of Realtors reported today in Washington. The median forecast of 79 economists surveyed by Bloomberg called for a 5.26 million pace. The pace of the demand was the second strongest since November 2009 following May’s downwardly revised 5.14 million rate.
The number of houses for sale at the end of last month were the fewest for any June since 2001 as rising prices depleted the number of cheaper houses on the market. Federal Reserve Chairman Ben S. Bernanke last week said housing was one of the bright spots for growth and added that policy makers will monitor the recent jump in interest rates to ensure it won’t derail the nascent recovery.
“What’s holding sales down is just that there’re just not a lot of homes for sale,” Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts, said before the report. “We’re not expecting really strong numbers for the rest of the year even though the housing market is getting hot. What you’re seeing is this pent-up demand show up in higher prices, not in higher sales.” He projected a June sales rate of 5.12 million.
Estimates in the Bloomberg survey of economists ranged from 4.99 million to 5.5 million. The prior month’s pace was revised from a previously reported 5.18 million.
The median price of an existing home climbed 13.5% to $214,200 last month from $188,800 a year earlier, today’s report showed.
The number of properties on the market increased 1.9% to 2.19 million, the fewest for any June since 2001. At the current sales pace, it would take 5.2 months to sell those houses compared with 5 months at the end of May.
“Momentum still appears to be strong,” NAR Chief Economist Lawrence Yun said at a news conference as the figures were released. “The inventory shortage is continuing to push prices higher.”
The shortage was particularly acute at lower price points as price increase push homes out of reach of first-time buyers, he said.
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