WASHINGTON – U.S. sales of previously occupied homes dipped in June to a seasonally adjusted annual rate of 5.08 million in June but remain near a 3½-year high.
The National Association of Realtors said Monday that sales dipped last month from an annual rate of 5.14 million in May. The NAR revised down May's sales, but they were still the highest since November 2009.
Despite last month's dip, sales are up 15.2 percent from a year ago. Home sales have recovered since early last year, buoyed by job gains and low mortgage rates.
Still, mortgage rates have surged in recent weeks over concern that the Federal Reserve could slow its bond-buying programs this year. The Fed's bond purchases have helped keep long-term interest rates low.
Higher mortgage rates slowed sales of higher-priced homes in states such as California and New York, the Realtors group said.
The average rate on a 30-year fixed mortgage leapt to 4.46 percent by the end of June from 3.81 percent at the end of May. The rate was 4.37 percent last week.
Most economists aren't yet worried that the higher rates will undercut the housing recovery. Mortgage rates are still at historically low levels, and home prices remain relatively affordable despite rising in the past year. In addition, higher mortgage rates could encourage potential buyers to come off the sidelines and purchase homes before rates rise further.
But many of those buyers may be frustrated by the small number of available homes, which has helped push up prices. The number of homes for sale rose 3.3 percent in May to 2.2 million, the second straight increase. But inventories are still 10 percent below year-ago levels.
Another obstacle is a lack of first-time buyers, who usually drive healthy markets. They made up only 28 percent of buyers in May, below the 40 percent that is typical. Since the housing bubble burst more than six years ago, banks have imposed tighter credit conditions and required larger down payments. That's made it harder for first-time buyers to qualify for mortgages.
The strength in housing this year has offset weaknesses elsewhere in the economy, like manufacturing and business investment. Rising home sales lead to more spending at furniture and home supply stores.
Homebuilders have also stepped up construction in the past year, creating more construction jobs. In June, they applied for permits to build single-family homes at the fastest pace in five years.