Existing home sales fall 3.8% but prices rise

U.S. SALES of existing homes in June were 3.8% lower than in the month before and 11.4% slower than in June 2006. Above, Realtor Betsy Heller, left, shows a home in the tony Rancho Santa Fe section of San Diego to prospective buyer Lauren Grizzle. /
U.S. SALES of existing homes in June were 3.8% lower than in the month before and 11.4% slower than in June 2006. Above, Realtor Betsy Heller, left, shows a home in the tony Rancho Santa Fe section of San Diego to prospective buyer Lauren Grizzle. /

WASHINGTON – Sales of existing homes nationwide fell in June, to the slowest pace in five years, but prices edged up as inventories eased, according to a report today from the National Association of Realtors.
Total sales – including single-family homes, townhouses, condominiums and co-ops – fell last month to a seasonally adjusted rate of 5.75 million units per year. That was a decline of 3.8 percent from May’s revised pace of 5.98 million and 11.4 percent from the June 2006 pace of 6.49 million units per year.
The decline was sharper than expected, according to Bloomberg News, whose survey of 73 economists predicted the sales pace would fall 2.1 percent from the NAR’s original May estimate of 5.99 million units per year.
“Home buyers have been getting mixed signals about the housing market, which is causing some of them to hesitate,” said Lawrence Yun, the NAR’s senior economist. “Mortgage interest rates have risen recently, and tightening lending standards are continuing to hamper sales, but fewer risky loans will put the market on a healthier path.”
The median resale price rose to $230,100, an increase of 0.3 percent from the June 2006 median of $229,300. Bloomberg called it the first year-over-year increase in 11 months.
The inventory of existing homes on the market fell 4.2 percent to 4.20 million homes for sale at the end of June. At the current sales pace, that represents an 8.4-month supply – the same as the revised housing supply at the end of May, the NAR said.
In the Northeast, the resale rate slowed in June to 1.01 million units per year, a decline of 7.3 percent from both the previous month and June 2006. But the median home price edged up 1.8 percent compared with June 2006, to $294,400 last month.
Elsewhere, home sales and prices both rose slightly in the South but fell in the West and Midwest.
“There’s no evidence we’ve hit bottom yet,” said James O’Sullivan, senior economist at UBS Securities LLC in Stamford, Conn. “The inventory numbers are encouraging [but] I wouldn’t celebrate yet.”
Said the NAR’s Yun: “Although general buying conditions remain favorable for long-term home buyers, it appears some buyers are looking for more signs of stability before they have enough confidence to make an offer.”
The National Association of Realtors is the nation’s largest trade association, with more than 1.3 million members in all aspects of residential and commercial real estate. Additional information is available at www.realtor.org.

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