Washington, DC, July 22, 2013—Existing home sales declined in June 1.2% to an annualized rate of 5.08 million units. Lack of inventory and rising interest rates are a key factor.
The number of houses for sale at the end of last month was the fewest for any June since 2001 as rising prices depleted the number of cheaper houses on the market. Federal Reserve Chairman Ben S. Bernanke last week said housing was one of the bright spots for growth and added that policy makers will monitor the recent jump in interest rates to ensure it won't derail the nascent recovery.
The median price of an existing home climbed 13.5% to $214,200 last month from $188,800 a year earlier, today's report showed. This is the 16th straight month that the value has increased and the 7th straight month of double-digit year-over-year increases.
The number of properties on the market increased 1.9% to 2.19 million, which represents a 5.2-month supply but is the fewest for any June since 2001.
The median time on the market for all homes was 37 days in June. This is down from 41 days in May, and is 47% faster than a year ago.
"Momentum still appears to be strong," NAR Chief Economist Lawrence Yun said at a news conference as the figures were released. "The inventory shortage is continuing to push prices higher."
The shortage was particularly acute at lower price points as price increases push homes out of reach of first-time buyers, he said.