WASHINGTON - Purchases of previously owned U.S. 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 percent to a 5.29 million annual rate, the National Association of Realtors reported Monday 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 percent, pushing affordability to an almost five-year 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 expansion. 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 see a little bit of a bumpy ride,” said Kevin Cummins, an economist at UBS Securities LLC in Stamford, Conn., who correctly projected the drop in sales. “The jury is still out on home sale and how much of a pullback we might see due to higher mortgage rates.”
Stocks were little changed, after the Standard & Poor’s 500 Index rallied to a record at the end of last week, as investors watched corporate earnings to assess the strength of the economy before Tuesday’s jobs data. The S&P 500 rose 0.2 percent to 1,747.24 at 10:06 a.m. in New York.
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, Monday’s report showed. Purchases increased 15.1 percent in September from the same month last year before adjusting for seasonal variations.
The number of existing properties for sale was 2.21 million at the end of last month, up from 2.17 million at the same time in 2012. It was the first time inventory increased on a year-to- year basis in more than two years, the group said. The number of houses on the market still needs to rise by 30 percent to 40 percent to stabilize conditions, Yun said.