Star Metro - US existing home sales dip in June as cost worries persist

Existing home sales fell by 2.4 percent on a month-on-month basis, to a seasonally adjusted annual rate of 4.09 million, said the National Association of Realtors (NAR).

This came as average mortgage rates ticked up.

"The back-and-forth in monthly home sales activity, driven by mild fluctuations in mortgage rates, shows how sensitive home buyers are to affordability conditions," said NAR chief economist Lawrence Yun in a statement.

He added that the median home price has hit an "all-time high," and that progress on long-term housing affordability could be hampered if inventory growth stalled further.

"The existing home sales market remained dormant in June, amid high mortgage rates and low consumer confidence," said economist Samuel Tombs of Pantheon Macroeconomics.

He did not expect "imminent improvement" and warned that sales were no longer "meaningfully constrained by a lack of supply" as the number of properties for sale ticked up in June.

Heather Long, chief economist at the Navy Federal Credit Union, flagged a divergence in home sales based on consumer wealth.

"Sales are booming for homes that cost $1 million or more," Long said, but were "a lot more modest in the middle tier and, especially, the more affordable homes."

The median sales price across housing types in June was $440,600, the NAR report said.

In that month, the popular average 30-year fixed-rate mortgage was 6.49 percent, up from 6.44 percent in May.

But Long added: "The good news is there is strong pent-up demand for homebuying."

"At least two million potential buyers are sitting on the sidelines ready to buy if they can find the right option," she estimated.

A.Desjardins--SMC