Home Sales Down 1.2 Pct, Prices Rise: NAR

U.S. home re-sales unexpectedly fell in June after two straight months of steady increases as the supply of homes for sale remained tight and short-sales and purchases of foreclosed homes plunged.

According to the National Association of Realtors (NAR), the number of hone sales dropped 1.2 percent to an annual rate of 5.08 million in June from a downwardly revised 5.14 million in May from the previously reported 5.18 million units. However, sales were up 15.2 percent compared to June, 2012.

The NAR said a spike in mortgage rates, in anticipation of the Federal Reserve starting to reduce its massive monetary stimulus later this year, had probably dampened sales in June.

NAR chief economist Lawrence Yun said there is enough momentum in the market, even with higher interest rates.  "Affordability conditions remain favorable in most of the country, and we're still dealing with a large pent-up demand," he said. 

"However, higher mortgage interest rates will bite into high-cost regions of California, Hawaii and the New York City metro area market."

Total housing inventory at the end of June rose 1.9 percent to 2.19 million existing homes available for sale, which represents a 5.2-month supply at the current sales pace, up from 5.0 months in May, according to the statement.  Listed inventory remains 7.6 percent below a year ago, when there was a 6.4-month supply.  "Inventory conditions will continue to broadly favor sellers and contribute to above-normal price growth," Yun remarked.