June 2013 US existing home sales dip unexpectedly though interest rate hikes won't be reflected until July data

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7/22/13, "US existing home sales dip unexpectedly in June," BBC

"Sales of existing homes in the US dropped slightly in June, according to latest monthly figures.

Sales fell 1% to an annual rate of 5.08 million, from a downwardly-revised 5.14 million in May, the National Association of Realtors said.

The surprise fall suggests a sharp rise in mortgage borrowing rates seen at the end of the month may have affected activity sooner than expected.

The average 30-year mortgage rate rose from 3.68% to 4.07% in the month.

This brought the interest rate back up to its highest level since October 2011.
 
Borrowing costs began to rise sharply in late June as markets began to anticipate that the US Federal Reserve would curtail its monetary stimulus measures and then begin raising interest rates far sooner than previously thought."...

[Ed. note: "Critically though, this is for a period that reflects closings with mortgage rates from the April/May period - before the spike in rates really accelerated."] 

(continuing): "Despite this, analysts had been expecting property sales to continue rising for another month, to 5.27 million on an annualised seasonally-adjusted basis.

The dollar weakened on the result, with the euro gaining a further half cent to $1.321.

"Affordability conditions remain favourable in most of the country, and we're still dealing with a large pent-up demand," said Lawrence Yun, chief economist at the estate agents' industry body behind the statistics.

"However, higher mortgage interest rates will bite into high-cost regions of California, Hawaii and the New York City metro area market."...

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7/22/13, "Existing Home Sales Fall By Most In 2013, Biggest Miss In 12 Months," Zero Hedge

"Existing home sales dropped 1.2% month-over-month - the biggest drop in 2013 - against expectations for a 1.5% rise. Critically though, this is for a period that reflects closings with mortgage rates from the April/May period - before the spike in rates really accelerated
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Inventory rose once again to 5.2 months of supply (vs 5.0 in May) and you know the realtors are starting to get concerned when even the ever-optimistic chief economist of the NAR is forced to admit that 'stunningly' "higher mortgage rates will bite." With mortage applications having collapsed since May, we can only imagine the state of home sales (especially as we see all-cash buyers falling) for July."...

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7/22/13, "Sales of Existing Homes in U.S. Unexpectedly Dropped in June," Bloomberg Business Week, A. Baca

"Sales of previously owned houses unexpectedly dropped in June, hurt by a lack of supply and rising mortgage rates that will slow the rebound in the U.S. real-estate market."...



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