Today’s Realtors’ report showed pending home sales increased 9.1 percent from June 2012 on an unadjusted basis.
Two of four regions showed a decrease in contract signings from a month earlier, including a 2.1 percent drop in the South and a 1 percent decline in the Midwest, today’s report showed.
The average rate on a 30-year fixed mortgage was 4.31 percent last week, up from 3.35 percent in the period ended May 2, according to figures from Freddie Mac. In November, the average rate reached a record low of 3.31 percent.
At the current rate, the monthly payment on a $200,000 30- year loan is about $991 compared with $877 in November.
The increase in borrowing costs, reflecting expectations that the Federal Reserve will begin dialing back record monetary stimulus later this year, has started to affect demand for new homes.
PulteGroup Inc. and D.R. Horton Inc., the largest U.S. homebuilders, reported fewer-than-expected orders. Bloomfield Hills, Michigan-based PulteGroup said second-quarter orders fell 12 percent on a lower community count. D.R. Horton said orders increased 12.2 percent, below analysts’ forecast.
There’s “no question” rising rates affected sales, D.R. Horton Chief Executive Officer Donald Tomnitz said last week.
Purchases of previously owned homes fell 1.2 percent to a 5.08 million annualized rate, the National Association of Realtors reported on July 22. The pace was still the second- strongest since November 2009. The median price of an existing home climbed 13.5 percent to $214,200 last month from $188,800 a year earlier, while the number of properties available was the fewest for any June since 2001.
Job growth will probably help keeping housing demand from faltering. Payrolls expanded by 195,000 workers for a second month in June.
The housing recovery has potential to boost companies like Lumber Liquidators Holdings Inc. Daniel Terrell says the Toano, Virginia based hardwood flooring retailer has room to take greater advantage of coming improvements.
“We are definitely seeing a firming in the housing market,” Terrell said in a July 24 earnings call. “We still believe we’re not seeing a full-scale recovery or a tsunami of pent-up demand come yet, but we’ve got low share.”