WASHINGTON, July 9 U.S. existing home sales unexpectedly fell in June as house prices hit a record high and mortgage rates remained elevated, pushing potential buyers to the sidelines.
Home sales dropped 2.4% last month to a seasonally adjusted annual rate of 4.09 million units, the National Association of Realtors said on Thursday
Economists polled by Reuters had forecast home resales would climb to a rate of 4.20 million units. Sales increased in the Northeast, but declined in the Midwest, South and West. Existing home sales are counted at the closing of a contract.
Last month’s sales likely reflected contracts signed in April and May. Though mortgage rates have retreated after surging in response to the war in the Middle East, the average rate on the popular 30-year fixed-rate mortgage remains about 45 basis points above its pre-conflict level, data from mortgage financing firm Freddie Mac showed. Home sales increased 2.8% on a year-over-year basis in June. “The back-and-forth in monthly home sales activity, driven by mild fluctuations in mortgage rates, shows how sensitive home buyers are to affordability conditions,” said Lawrence Yun, the NAR’s chief economist.