WASHINGTON, July 26 (AFP) - US existing home sales bolted to a record high in June, shattering forecasts of a slowdown as people clamored for cheap mortgages, an industry survey showed Monday.
Sales surged 2.1 percent to a seasonally adjusted annual rate of 6.95 million homes, breezing past the previous month's record of 6.81 million, the National Association of Realtors (NAR) said.
Compared to a year ago, sales were up 17.4 percent.
"Although we have been expecting sales to ease, it is clear the market has tremendous momentum," NAR chief economist David Lereah said.
Last month's performance would likely be close to the peak for the housing market, he said.
"The improving job market and higher consumer confidence are feeding into a large demographic demand for housing. It is unlikely that we will top the pace in June but home sales remain very healthy and are likely to stay quite strong, even with some easing expected in the second half of the year."
Prices, too, soared.
The middle of the range, or median, existing home price surged 9.6 percent from a year earlier to a record 191,800 dollars.
NAR president Walt McDonald said mortgage interest rates were surprising the market.
"The 30-year fixed-rate mortgage has come back down and has been hovering around 6.0 percent over the last few weeks," he said.
According to mortgage wholesale giant Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.29 percent in June, up from 6.27 percent in May.
It was 5.23 percent in June 2003, the lowest since Freddie Mac started tracking mortgage interest rates in 1971.
"Considering most forecasts projected mortgage interest rates to gradually rise, this could keep the housing market from taking as much of a breather as we have anticipated -- 2004 is well on the way to setting an annual record," McDonald said.
Inventories slipped to 2.40 million existing homes available for sale at the end of June, enough to last 4.1 months at the current sales pace. In May, there were 2.42 million homes, enough to last 4.3 months.