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Five Takeaways From the Existing Home Sales Report
Nick Timiraos / The Wall Street Journal / July 22, 2013
Sales of previously owned homes rose by 15.2% in June from one year ago to a seasonally adjusted annual rate of 5.08 million, but they were down by 1.2% from one month ago, according to the National Association of Realtors.
Monday’s report showed that the housing market may be slowly returning to equilibrium after a year in which demand has outstripped supply, pushing up prices. At the current pace of sales, there was a five-month supply of homes in June on a seasonally adjusted basis, up from the 4.9-month supply in May but down from the 6.1-month supply a year earlier.
Did higher interest rates have an impact on home sales? It’s probably too early to say. Mortgage rates began to rise during the last week of May, and many homes that sold in June went under contract in May — before rates really began to rise. Because many homes that went under contract in June — the first month of truly higher mortgage rates — won’t close until July, the full impact of the rate increase won’t be seen for another month.
Some 40% of economists polled by The Wall Street Journal this month said rising rates wouldn’t have a noticeable effect on sales. Around one-third of economists said rate increases would slow sales, and around one-quarter said it would slow home-price gains.