WASHINGTON – Sales of existing homes rose 2.1 percent to a new record in June as rising mortgage rates (search) prompted a rush by Americans to close deals before rates went even higher.
The National Association of Realtors (search) reported Monday that the increase in sales pushed the annual rate of existing home sales (search) to an all-time high of 6.95 million units, beating the old record set in May of 6.81 million units.
The pace of home sales this year has surprised analysts, who had been predicting that sales would begin to slow, reflecting the fact that interest rates have started to increase.
"Although we've been expecting sales to ease, it's clear that the market has tremendous momentum," said David Lereah, chief economist for the Realtors. "The improving job market and higher consumer confidence are feeding into a large demographic demand for housing."
Still, Lereah said that it was unlikely that the June record would be surpassed as he expected sales to cool a bit in coming months. But the Realtors said they still looked for sales for all of 2004 to set a new record, based on the surprising strength exhibited through the first half of the year.
For June, the 2.1 percent increase in sales reflected strength in all parts of the country, led by a 3.5 percent increase in the Midwest followed by gains of 3.1 percent in the West, 2.8 percent in the Northeast and 0.4 percent in the South.
The median sales price also hit a record in June, rising to $191,800, up from a price of $182,400 in May.