U.S., State Home Sales Set Records in June, Spurred by Rate Worries

Sales of existing homes in California and across the nation reached record highs last month as the specter of rising interest rates pushed a growing number of buyers to take the leap into homeownership, two real estate trade groups said Monday.

June sales of existing U.S. homes rose to a seasonally adjusted annualized rate of 5.53 million--an 8.9% jump over the 5.08-million pace recorded in June 1998, according to the National Assn. of Realtors.

NAR President Sharon A. Millett attributed much of the increase to the “fence-jumping effect,” which began this spring as thousands of buyers who feared rising interest rates stopped waiting for better circumstances and committed themselves to buying a home.

The organization also reported that the median sale price rose to $137,000 in June, up 4.3% from a year ago.

The housing market performed even better last month in California, where sales of existing homes increased to a seasonally adjusted annualized rate of 702,100, up 9.5% over June 1998, according to the California Assn. of Realtors.

“What you’re seeing is a continued and extremely robust market driven by job growth,” said Leslie Appleton-Young, the association’s vice president and chief economist. “Overlying this is a robust consumer who will not be denied.”

The median price of existing homes in California rose to $226,140--up 8.2% from $209,000 in June 1998.

Year-over-year price increases were more modest in Los Angeles County, where a 2.2% hike boosted the median home price to $206,430. Countywide sales, meanwhile, dipped 4.7% during the period.

“I don’t see it as the beginning of a downward spiral,” Appleton-Young said.