From the WSJ:
The number of Americans signing contracts to buy previously owned homes slipped in June, a sign higher mortgage rates could slow housing-market momentum in coming months.
The National Association of Realtors said Monday that its index of pending home sales fell 0.4% in June from a month earlier to a reading of 110.9. The pace of sales was still strong, with the slight drop coming after pending sales reached a six-year high in May. Pending sales in June were 10.9% higher from a year ago.
However, the Realtors group said the June drop was likely a sign a rise in mortgage rates from May is starting to scare away some prospective buyers. The group said some people appeared to pull out of contracts for homes after rates rose sharply form when they initially signed.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said the latest data suggest that completed home sales will rise in August but could slow from there. “We think any further progress in the short term will be a real struggle, thanks to the surge in mortgage rates since early May,” Mr. Shepherdson said in a note to clients.
Other reports recently have indicated the housing market remains strong. The Commerce Department reported last week sales of new homes rose 8.3% in June from a month earlier. Also last week, the NAR said sales of previously owned homes eclipsed the annual pace of 5 million for the second consecutive month in June, despite slipping from May.
Jim O’Sullivan, chief U.S. economist at High Frequency Economics, said the pending home-sales report will cause a greater focus on housing in the coming months as the Federal Reserve ponders when to rein in its stimulus measures. “A genuine weakening in housing would encourage the Fed to delay tapering plans,” Mr. O’Sullivan wrote in a note to clients.