Rising rates, shortages chill sales of U.S. homes | Pound Ridge Real Estate

National home sales fell in June thanks to rising mortgage rates and inventory shortages, after reaching a six-year high in May, but stayed even in the Northeast.

The Pending Home Sales Index, which is based on home contract signings, fell by 0.4 percent to 110.9 in June, the National Association of Realtors said. Still, the index is nearly 11 percent higher than a year before.

The report added: “The PHSI in the Northeast was unchanged at 87.2 in June but is 12.2 percent higher than a year ago.”

In June, Massachusetts recorded its the best month for home sales since June 2010, according to the Warren Group.

The national decline comes after the index hit a six-year high in May, and seems to have been brought by rising mortgage rates and fewer homes for sale, the NAR said.

“Mortgage interest rates began to rise in May, taking some of the momentum out of contract activity in June,” NAR chief economist Lawrence Yun said.

The average 30-year mortgage rate was 4.31 percent last week, and reached a two-year high of 4.51 percent in late June. The rates jumped after Federal Reserve chairman Ben Bernanke said the central bank could slow its bond-buying program later this year.

Also adding to the slowdown is a lack of homes on the market.

“The persistent lack of inventory also is contributing to lower contract signings,” Yun said.

 

Rising rates, shortages chill sales of U.S. homes | Boston Herald.