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 percent to a 5.08 million annualized rate, the National Association of Realtors reported Monday 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.
Rising prices meant there were fewer properties valued at less than $100,000 for first-time buyers to purchase — hurting sales — and higher mortgage rates are also starting to cool demand for more expensive houses in the West and Northeast, according to the real-estate agents group.
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 are just not a lot of homes for sale,” Patrick Newport, an economist at IHS Global Insight in Lexington, Mass., 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 percent to $214,200 last month from $188,800 a year earlier, Monday’s report showed.
The number of properties on the market increased 1.9 percent 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 for homes priced at less than $100,000, making it difficult for first-time buyers to find affordable properties, he said.
Sales of existing single-family homes decreased 1.1 percent to an annual rate of 4.5 million. Purchases of multifamily properties including condominiums dropped 1.7 percent to a 580,000 pace.
Purchases declined in three of four regions, led by 1.6 percent decreases in both the Northeast and West. Demand was little changed in the Midwest.
Existing-home sales are recovering after reaching a 13-year low of 4.11 million in 2008. The market peaked at a record 7.08 million in 2005. Resales accounted for about 93 percent of the residential market in 2012.
The strengthening housing market has bolstered household wealth and suggests the economic expansion will hold.