WASHINGTON--A broad measure of U.S. home sales climbed for the
third consecutive month in June, a sign the housing market is
gaining steam after a months-long slump.
Sales of existing homes rose 2.6% to a seasonally adjusted
annual rate of 5.04 million in June, the National Association of
Realtors said Tuesday. That was the highest level since
October.
Revisions showed May sales reached 4.91 million, up from an
initially reported 4.89 million.
Economists surveyed by The Wall Street Journal had expected
existing-home sales to hit a rate of 5 million in June.
"We are seeing a more broad-based recovery" in the housing
market, said Lawrence Yun, NAR's chief economist. He pointed to an
increase in purchases by first-time home buyers, sales rising
across all four regions in the U.S., and healthy sales of both
single-family homes and condominiums.
But despite the rise, the market hasn't regained its earlier
momentum. Compared with a year ago, sales were down 2.3% last
month. At the current pace, sales are roughly at the level they
were in 2000, even though the U.S. population has grown, the
economy has more jobs and interest rates remain at historically low
levels. Mr. Yun said the housing market is still
"underperforming."
Existing-home sales make up roughly 90% of all home purchases.
Home sales were robust in 2012 and the first half of 2013,
underpinning the U.S. recovery. But sales slowed in the middle of
last year, as a rise in interest rates and a run-up in prices
likely scared away many prospective buyers. This winter's harsh
weather also likely sapped activity.
Interest rates have fallen back this year, likely helping to
boost sales in the crucial spring selling season. Also, robust job
growth this year could be boosting the market.
Tuesday's report showed home prices are growing more slowly than
in prior months. The median sale price for a home last month was
$223,300, up 4.3% from a year earlier.
The inventory of homes available for sale climbed 6.5% from a
year earlier. At the current pace, it would take 5.5 months to
exhaust the supply, a level close to what economists consider a
sign of a "balanced" market.
One factor that could influence the direction of the market is
interest rates. The average rate on a 30-year mortgage fell to
4.13% last week, below year-ago levels, according to figures from
Freddie Mac. But rates are expected to rise in coming months as the
Federal Reserve winds down its bond-buying program, which has
helped push down rates to historic lows. Fed officials agreed in
their June policy meeting to end the bond-buying program in
October.
Write to Josh Mitchell at joshua.mitchell@wsj.com and Alan Zibel
at alan.zibel@wsj.com.
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