Even with mortgage rates at an all-time low, home sales dropped unexpectedly in June and have reached their lowest rate since October. The annual rate came in at 4.37 million for the month — 5.4% less than the 4.62 million annual rate in May and a quarter-million below the expectation of economists.
Those surveyed by Bloomsberg News, for example, were expecting a range between 4.42 million to 4.75 million, while the median estimate for that group was 4.62 million.
The report and estimates were both far under the 6 million annual pace that economists consider an indicator of a healthy market.
Breaking down the sales trend, condominium and co-op sales dropped nearly 8%, while sales of single-family homes fell just over 5%. Overall inventory of existing homes decreased 3.2% since the previous month, to a total around 2.39 million.
The median sales price for existing homes continued to grow, though, jumping 7.9% to $189,400 as more people are buying higher-priced properties.
Slower job growth, stricter lending standards and competition from cheaper distressed properties are blamed for the unexpected drop in sales, according to Bloomsberg.
-Alyssa Oursler, Editorial Assistant