Home sales in the U.S. witnessed a slight unexpected dip in the month of June as average mortgage rates climbed a little. However, the current figures of sales remain at a three and a half year high, according to the data released by the National Association of Realtors (NAR).
Total existing home sales fell 1.2 percent in the month of June to a seasonally adjusted 5.8 million. However, the rate remains 15.2 percent higher on a year over year basis. About 8 percent of the home sales were foreclosures and 7 percent were short sales. Median home prices also went up as more homes went under the escrow. Prices were up 13.5 percent when compared to the figures of 2012.
Prices are expected to soar higher with inventory still in tight conditions. Available stock for June is still 7.6 lower when compared to the data of the same month in 2012.
"Affordability conditions remain favorable in most of the country, and we're still dealing with a large pent-up demand. However, higher mortgage interest rates will bite into high-cost regions of California, Hawaii and the New York City metro area market," Lawrence Yun, Chief Economist at NAR, said in a press statement.
"Inventory conditions will continue to broadly favor sellers and contribute to above-normal price growth," he added.
Check out a video of the press statement, below:
Average 30-year-mortgage rates jumped to reach 4.46 percent in June from the earlier prevailing 3.81 percent. As of last week, rates were something around 4.37 percent, reports The Boston Globe.
Experts are calling the prevailing conditions a "seller's market". In a recent report by property site Zillow, the home appreciation values were analyzed. The analysis showed that over the next one year/12 months, values will rise over five percent across the country. The growth of home values is alarmingly steady and while it might look like a bubble is just around the corner, it is not. In fact, the market is set to stabilize in the second half of the year.
"Investors are starting to pull out of some markets and regular buyers are coming back, and more inventory is slowly but surely coming on line, both of which will contribute to slowdowns in appreciation. Additionally, in some overheated markets, rapid home value increases coupled with rising mortgage rates will lead to housing prices and financing costs outpacing local income growth, which will also contribute to a moderation of the market. Combined, all of these factors will help the market in the second half of 2013 and beyond normalize and become much more steady than it has been in these past six months," Svenja Gudell, Senior Economist at Zillow, said in the report.
