Existing home sales fell slightly in June

“However, higher mortgage interest rates will bite into high-cost regions of California, Hawaii and the New York City metro area market.”

Mortgage rates have jumped in recent weeks over worries that the Federal Reserve could slow its massive monetary stimulus program some time year. 

Fed Chairman Ben Bernanke tried to reassure lawmakers last week that even if the central bank slow its bond-buying program that interest rates will remain near zero for the foreseeable future. He estimated that rates will probably stay low until the jobless rate has dropped to 6.5 percent, which could mean 2015. 

The rate of 30-year fixed-rate mortgage rose to 4.07 percent in June from 3.54 percent in May, and is the highest since October 2011 when it was also 4.07 percent, according to Freddie Mac. 

Still, rates remain near historic lows and some economists argue that the jump won’t pose much of a threat to the improving housing market. 

The other main concern about the market is the sheer lack of housing options. Inventory has remained low but rising housing prices could spur sellers to get their homes on the market.

At the current sales pace, the number of homes for sale would be exhausted in 5.2 months, up from five months in May, which is below the six-month supply that is consistent with a healthy housing market.

“Inventory conditions will continue to broadly favor sellers and contribute to above-normal price growth,” Yun said.

Distressed homes — foreclosures and short sales — were 15 percent of June sales, down from 18 percent in May, and are the lowest share since monthly tracking began in October 2008. They were 26 percent in June 2012.  

The median time on market for all homes was 37 days in June, down from 41 days in May, and is 47 percent faster than the 70 days on market in June last year.

First-time buyers accounted for 29 percent of purchases in June, compared with 28 percent in May.  

“First-time buyers should be closer to 40 percent of the market, but they’re held back by the frictions of tight credit and very limited inventory in the lower price ranges in most of the U.S.,” Yun said.

Regionally, sales either fell or stayed the same as May’s levels. 

Sales in the Northeast declined 1.6 percent, dropped 1.5 percent in the South and were down 1.6 percent in the West. Sales remained unchanged in the Midwest.