Homes Sales, Median Price Hit Record Levels

Existing homes were sold at the fastest pace in history nationwide last month, and the median price set a record as well. But some private economists predict the housing market may be nearing its peak as mortgage rates begin to rise.

In June, existing homes sold at an annual rate of 7.33 million units, an increase of 2.7% from the seasonally adjusted sales pace in May, according to a report Monday from the National Assn. of Realtors.

The gain reflected a 2.4% rise in sales of single-family homes, which climbed to a record of 6.37 million units at an annual rate. Sales of condominiums also set a record, rising by 4.5% from May to an annual rate of 966,000 units in June.

The strength in sales helped push the median price of an existing home to a record of $219,000, an increase of 14.7% from the median, or midpoint, for homes sold a year ago. That was the biggest jump in prices in nearly 25 years, since a 15.6% year-over-year increase in November 1980.

David Lereah, chief economist for the association, said the boom in housing was being driven by mortgage rates that have remained near rock-bottom levels this year even as the Federal Reserve has continued to raise short-term interest rates.

But other analysts noted that mortgage rates, as measured by Freddie Mac’s nationwide survey, have risen for three straight weeks and now stand at 5.73% for a 30-year mortgage, a development they expect will start to dampen both demand and prices.

The record sales pace last month came as a surprise as analysts had forecast that sales would be unchanged following a 0.6% decline in May after existing-home sales had hit their previous record of 7.18 million units in April.

For June, sales were strong in all regions of the country. The gains were led by a 5.5% increase in the West to an annual sales rate of 1.73 million units. Sales were up 3.4% in the Northeast, 1.9% in the Midwest and 1.1% in the South.