U.S. Existing-Home Sales Increase 3.2% in June

By Laura Kusisto 

        WASHINGTON--Prices of existing homes sold in the U.S. hit a nominal high in June, eclipsing the previous mark set in 2006, as sales increased at their strongest pace in more than eight years.
        The median sale price for a previously owned home was up 6.5% in June from the same month a year earlier to $236,400, the National Association of Realtors said Wednesday. That topped the previous high of $230,400 recorded in July 2006, the peak month of the previous housing cycle. The figures aren't adjusted for inflation.
        The pace of existing-home sales, meanwhile, increased 3.2% last month from May to a seasonally adjusted rate of 5.49 million, the strongest since February 2007. Sales for May were revised down to 5.32 million from an initially reported 5.35 million.
        Economists surveyed by The Wall Street Journal had expected June sales would edge up 0.9% to a pace of 5.4 million.
        Distressed-property sales comprised only 8% of the market, matching the lowest figure since the NAR began tracking the data in 2008.
        Economists said the numbers reflect a strong summer selling season, buoyed in part by buyers anxious to get into the market before mortgage rates and prices rise further.
        The June jump "provides further evidence that the housing recovery has shifted into a higher gear," Andrew Hunter, an economist for research firm Capital Economics, said in a note to clients. "The resilience of the wider economy and high levels of consumer confidence should ensure that this strength continues in the months ahead."
        According to mortgage company Freddie Mac, the average rate for a 30-year fixed-rate mortgage rose in June to 3.98% from 3.84% in May.
        "Any time the interest rates rise...the buyers rush in thinking this may be their last chance to catch these low rates," said Lawrence Yun, chief economist for the NAR.
        Sales of existing homes account for roughly 90% of all purchases in the U.S. At the current pace of sales it would take five months to exhaust the supply of homes on the market, the NAR said Wednesday. Total housing inventory at the end of June increased 0.9% to 2.3 million existing homes available for sale.
        News Corp, owner of The Wall Street Journal, also owns Move Inc., which operates a website and mobile products for the National Association of Realtors.
        The June bounce came after a strong spring season. Sales were up sharply in May, driven in part by a return of first-time home buyers, which increased to 32% of all buyers from 27% the same period last year. In June first-time home buyers declined to 30% of overall buyers.
        "If home values rise too much, first-time buyers who should be rising in this improving economy just may be unable to buy a home," Mr. Yun said.
        Write to Laura Kusisto at laura.kusisto@wsj.com
        (END) Dow Jones Newswires

        July 22, 2015 12:39 ET (16:39 GMT)

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