Sales of existing single-family homes fell 5 percent in July, the first decline in six months, as rising mortgage interest rates dampened demand, a real estate trade group reported Friday.
The National Association of Realtors said that sales of existing homes dropped to a seasonally adjusted annual rate of 3.63 million units last month, following a 6.4 percent increase in June.The decline, the first since a 4.8 percent drop last January, was blamed on higher mortgage rates, but analysts noted that the annual rate of sales was still at the second-highest level of the past year and was second only to the June pace.
"Even with the recent and prospective increases in interest rates, sales in 1988 will almost certainly be higher than we anticipated at the beginning of the year," said John Tuccillo, chief economist of the Realtors group.
The median price of a home rose from June to July by $1,400 to $91,600, up 3.7 percent from a year ago, when the median sales price for an existing home was $88,300.
The West saw sales rise 3.2 percent to an annual rate of 690,000 units in July.
For the first time in a decade, the Midwest led in year-over-year price changes, with an increase of 7 percent to a median price of $70,600. The Northeast remained the highest-priced region of the country, with a median price of $146,700 last month, followed by a median price of $123,500 in the West and $85,600 in the South.
Tuccillo said that the big jump in home prices in the Midwest reflected a rebound in the region's industries because of the boom in manufacturing caused by rising exports.
All regions of the country except the West suffered sales declines in July.
The sharpest decline occurred in the South, where sales were down 7 percent in July to an annual rate of 1.32 million units. In the Northeast, sales dropped 6.8 percent to an annual rate of 690,000 units; while sales in the Midwest fell by 5.1 percent in July, compared to June, but were 4.4 percent higher than a year ago.