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June Existing-Home Sales Unexpectedly Fall as Prices Hit Record High, NAR Data Show

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June Existing-Home Sales Unexpectedly Fall as Prices Hit Record High, NAR Data Show

Existing home sales in the US unexpectedly decreased in June as the median price reached an all-time high, data from the National Association of Realtors showed Thursday.

Sales dropped 2.4% sequentially to a seasonally adjusted annual rate of 4.09 million units last month. The consensus was for a 1% increase in a survey compiled by Bloomberg. Sales fell in the Midwest, South and West, but increased in the Northeast.

"The back-and-forth in monthly home sales activity, driven by mild fluctuations in mortgage rates, shows how sensitive home buyers are to affordability conditions," NAR Chief Economist Lawrence Yun said. "However, job gains -- more than half a million since the beginning of the year -- will continue to provide support for the housing market."

The median sales price of existing homes increased 1.8% year over year to $440,600 in June, an all-time high, Yun said. The price also marked the 36th straight month of annual gains, according to the NAR report.

Although affordability is better than a year earlier, it is "critical" to introduce more housing supply to the market to increase the opportunity for homeownership, Yun said.

The average 30-year fixed-rate mortgage increased to 6.49% last month from 6.44% in May, but was down from 6.82% a year earlier, the NAR said, citing Freddie Mac data.

"To see prices drop significantly from this point, we would need either a comprehensive package of regulatory reforms and/or builder tax incentives from the federal government to increase supply, or a sharp rise in unemployment that forces households to downsize," Jefferies Chief US Economist Thomas Simons said in a note e-mailed toThursday.

"Based on the employment data we have seen so far this year, and based on the fact that the government is a little busy right now trying to wind things down in Iran, we do not see a significant probability of either one happening," Simons wrote.

Single-family home sales fell 2.4% month over month to 3.73 million units in June, while condominium and co-op sales were down 2.7% to 360,000 units, NAR data showed.

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