WASHINGTON – Sales of existing U.S. homes edged down 0.3 percent in June, the National Association of Realtors (search) said Friday while inventories jumped to the highest level in nearly 12 years.
Sales of pre-owned homes fell to a seasonally adjusted annual rate of 5.83 million units from a revised 5.85 million rate the month before. The number fell short of expectations of analysts polled by Reuters who forecast a rate of 6.0 million homes.
"Sales are still at a very high level and are consistent with low (interest) rates this year compared to last year," said Lawrence Yun, a senior economist at NAR.
The numbers contrasted with sales of new homes, which surged 4.7 percent to a record 1.160 million annual rate. Economists had expected new home sales to slip to a 1.120 million pace.
"The new home sales are at another all-time high, and while existing sales were less than expected, you can't be picky, they're still at historical highs. So it seems that housing demand remains very elevated." said Kathleen Stephansen, director of global economics at Credit Suisse First Boston in New York.
Existing homes inventories rose 5.9 percent to 2.50 million homes available for sale, or a 5.1 month supply at the current sales pace. The median sales price rose to $176,500 in June, up 7.7 percent from the same month a year ago.
Interest rates at 1960s lows have drawn homebuyers in droves. However, in recent weeks, rates have climbed on expectations of economic improvement.
Realtors still expect 2003 existing home sales to come in at a record level.