Pending Sales of Previously Owned U.S. Homes Decline 0.4% in June 2013

Fewer Americans signed contracts in June to buy previously owned homes, showing rising mortgage rates are beginning to restrain the housing market.

The index of pending home sales dropped 0.4 percent, less than forecast, to 110.9 in June after climbing a month earlier to the highest level since December 2006, figures from the National Association of Realtors showed today in Washington. The median forecast in a Bloomberg survey of 40 economists called for a 1 percent decline.

Lean inventories of cheaper properties and mortgage rates that have climbed about 1 percentage point since early May are making it harder for some Americans to purchase houses. At the same time, housing will probably benefit from improvement in the labor market and higher home values that encourage more listings.

“A gradual increase in mortgage rates is manageable for the housing market,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. The decline “is a bump in the road. As long as they don’t spike unexpectedly, I don’t see any real threat from current mortgage rates.”

What does this mean Liz? The local Jacksonville market did see a slowdown in sales in June 2013, but so far this year the average sales prices are up almost 15% for each month. It is still a great time to buy or sell a home and rates are still very low. Call me to learn more about what your home is worth.

Liz