Existing-Home Sales Up 2.1% in June to Another Record

Sales of existing homes hit an all-time high last month as rising mortgage rates triggered a rush by fence sitters to close deals before rates went higher.

The June increase, the fifth consecutive gain, pushed the seasonally adjusted annual rate of existing-home sales up 2.1% to 6.95 million units, beating the old record set in May of 6.81 million units, the National Assn. of Realtors said Monday.

Every region of the country either set or tied its record for sales activity. Sales in the West advanced 3.1% to a record 1.99 million units.

The June increase in home sales came as something of a surprise for analysts, many of whom were forecasting that sales would be flat as this year’s rise in mortgage rates finally began to cool the nation’s housing markets.

However, the figures showed that the rise in rates seemed to be having the opposite effect, pushing more people into the market to close deals before rates go higher.

“Although we’ve been expecting sales to ease, it’s clear that the market has tremendous momentum,” said David Lereah, chief economist for the Realtors. “The improving job market and higher consumer confidence are feeding into a large demographic demand for housing.”

But analysts said June might well be the high point for sales.

The June existing-home sales report showed that prices continued to rise along with sales. The median price for an existing home sold in June was $191,800, up 5.2% from the May median price of $182,400. The median price is the midpoint where half the homes sold for more and half for less.

The current price is 30% above the $147,800 median price recorded for 2001.