Purchases of previously owned homes fell in September for the first time in three months, retreating from an almost four-year high as rising prices and mortgage rates discouraged would-be buyers.
Sales dropped 1.9% to a 5.29 million annual rate, the National Association of Realtors reported today in Washington. The median forecast of 67 economists in a Bloomberg survey called for the pace to slow to 5.3 million. Prices climbed 11.7%, pushing affordability down to a five-ear low, the group said.
Higher borrowing costs will probably hold back demand, slowing the housing rebound that’s been a source of strength for the recovery. At the same time, the damage done to fourth- quarter growth by the partial government shutdown raises the odds that the Federal Reserve will delay cutting back on bond purchases, which means interest rates may stabilize around current levels.
“We should see a series of weak numbers on existing home sales, but it’s nothing dramatic,” Yelena Shulyatyeva, U.S. economist at BNP Paribas in New York, said before the report. “Housing will remain an OK sector, a good sector, for the economy. It’s just that we’ll not see any acceleration.”
Economists’ estimates in the Bloomberg survey ranged from 5.1 million to 5.5 million. Data for August was revised to 5.39 million from a previously reported 5.48 million. The revision was larger than usual because the August data was released earlier than usual last month before additional information was available, NAR Chief Economist Lawrence Yun said at a news conference as the figures were released.
The median price of an existing home increased to $199,200 from $178,300 in September 2012, today’s report showed.