Existing home sales dipped slightly in June and May sales were revised down from previously reported levels the National Association of Realtors® (NAR) said today. Sales of previously-owned single-family houses, townhomes, condominiums and cooperative apartments dipped 1.2 percent on a seasonally adjusted basis to an annual rate of 5.08 million units compared to 5.14 million units in May. The May rate was originally reported at 5.18 million. The rate of sales in June was still 15.2 percent higher than the 4.41 million units pace in June 2012.

Despite slightly slowing sales, the median existing home price was $214,200 in June, a 13.5 percent annual increase and the 16th consecutive month of 22 such changes. The last time there was such an unbroken string of price hikes was February 2005 to May 2006.

Forming the background to today's NAR report are the rapidly changing interest rates in recent weeks. According to Freddie Mac, the national average commitment rate for a conventional 30-year fixed rate mortgage rose to 4.07 percent in June from 3.54 percent in May, the highest rate since October 2011. The June average was 39 basis points higher than a year earlier.

Lawrence Yun, NAR chief economist, said there is enough momentum in the market, even with higher interest rates.  "Affordability conditions remain favorable in most of the country, and we're still dealing with a large pent-up demand," he said.  "However, higher mortgage interest rates will bite into high-cost regions of California, Hawaii and the New York City metro area market."

Sales of single-family homes were 1.1 percent lower in June than in May, a seasonally adjusted annual rate of 4.50 million compared to 4.55 million, and 14.5 percent higher than the 3.93 million pace in June 2012. Existing condo and coop sales fell 1.7 percent month-over-month to 580,000 units from 590,000 units and 20.8 percent above the June 2012 rate of 480,000 units. The median sales price of a single-family home was $217,700 in June, 13.2 percent above a year ago. The median existing condo price was up 15.4 percent to $210,200.

Eight percent of sales in June were foreclosures and 7 percent were short sales. In May distressed sales had an 18 percent market share and in June 2012 they represented 26 percent of sales. Foreclosures sold an an average discount of 16 percent and short sales 13 percent compared to market transactions thus some of the increase in home prices can be attributed to the diminishing market share of distressed homes.

Total housing inventory at the end of June rose 1.9 percent to 2.19 million existing homes available for sale representing a 5.2-month supply at the current sales pace, up from 5.0 months in May.  Listed inventory remains 7.6 percent below a year ago, when there was a 6.4-month supply. 

Gary Thomas, NAR President, said some owners who were hurt by the downturn are now in the market.  "Rising values have improved the position of homeowners, and 16 percent of Realtors surveyed in June report they worked with a client that previously had an underwater mortgage," he said.

"Of those previously underwater owners, 53 percent were planning to buy another home and 22 percent intend to rent, but 25 percent weren't sure what they'd do.  In addition, 47 percent of Realtors report they have potential sellers who are waiting for additional price appreciation before they sell," Thomas said.

Marketing time continues to fall with a median time on market for all homes at 37 days in June compared to 41 days in May, and 70 days in June 2012.  Short sales were on the market for a median of 68 days, while foreclosures typically sold in 39 days and non-distressed homes took 35 days.  Forty-seven percent of all homes sold in June were on the market for less than a month.

First-time buyers accounted for 29 percent of purchases in June, compared with 28 percent in May and 32 percent in June 2012.  Yun said this figure should be closer to 40 percent of the market, first time buyers are being held back by tight credit and very limited lower priced inventory in much of the country.

All-cash sales made up 31 percent of transactions in June, down from 33 percent in May and 29 percent in June 2012.  Individual investors, who account for many cash sales, purchased 17 percent of homes in June, compared to 18 percent in May and 19 percent in June 2012.

Regionally, existing-home sales in the Northeast declined 1.6 percent to an annual rate of 630,000 but are 16.7 percent above June 2012.  The median price in the Northeast was $270,400, 6.8 percent above a year ago.

Existing-home sales in the Midwest were unchanged in June at a pace of 1.21 million, 17.5 percent higher than in June 2012. The median price was $170,100, up 8.9 percent on an annual basis.

In the South, existing-home sales slipped 1.5 percent to an annual level of 2.03 million in June but are 16.0 percent above June 2012.  The median price was $186,300, a 13.7 percent annual increase.

The pace of sales in the West declined 1.6 percent to 1.21 million in June but are 11.0 percent above a year ago.  Continuing tight inventory helped the median price jump 19.9 percent from June 2012 to $282,000.