Sales of existing homes fell again in July, their third consecutive monthly decline, as rising mortgage rates continued to cut into demand, a real estate trade group said Thursday.
Sales dipped 0.3 percent last month to a seasonally adjusted annual rate of 3.95 million, the National Association of Realtors reported.So far this year, sales have fallen five out of seven months, including a 3.6 percent drop in June, as mortgage rates have continued rising.
The Federal Home Loan Mortgage Corp. reported, meanwhile, that the national average for 30-year, fixed-rate mortgages edged up to 8.56 percent this week from 8.54 percent last week.
This rate, which hit a 25-year low of 6.74 percent last October, has been above 8 percent since late March as the Federal Reserve has steadily tightened credit conditions in an effort to combat inflationary pressures.
Even with the string of home sales declines, housing executives noted that sales are still 2.6 percent above the level of a year ago.
"Even with fluctuations in mortgage rates, we are on track for the second-best year on record for existing single-family home sales," said Robert H. Elrod, president of the Realtors group.
John Tuccillo, chief economist for the Realtors, said last week's boost in interest rates by the Fed - the fifth this year - should put inflationary fears to rest and lead to actual declines in long-term rates in coming months.
The national median price for an existing single-family home was $111,500 in July, down 1.2 percent from a median price of $112,800 in June. The median is the midpoint where half the homes cost more and half cost less.
By geographic area, the biggest sales decline was in the Northeast, a drop of 4.8 percent that left sales at an annual rate of 600,000 units. Sales also were off in the South, edging down 0.7 percent to an annual rate of 1.45 million units.
The West posted the best gain, a 2.4 percent rise to a rate of 850,000 units, followed by a 1.8 percent increase in the Midwest that put sales in that region at 1.05 million units in July.