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Existing home sales fall in June

The National Association of Realtors (NAR) announced this morning that sales of existing home sales dropped in the Midwest by 1.9 percent in June, but that home prices rose by more than 8 percent during the month. 

Nationally, home sales fell 5.4 percent to an annual rate of 4.37 million units, according to a release. Economists for Reuters predicted home sales would be at an annual rate of 4.3 million.

“Despite the frictions related to obtaining mortgages, buyer interest remains solid. But inventory continues to shrink and that is limiting buying opportunities. This, in turn, is pushing up home prices in many markets,” said Lawrence Yun, chief economist for NAR, in a release. “The price improvement also results from fewer distressed homes in the sales mix.”

Prices for existing homes rose 7.9 percent nationally, to a median price of $189,400, according to a release. Distressed or foreclosed homes made up 25 percent of sales in June. 

First-time buyers made about 32 percent of home purchases in June, little changed from the 31 percent of first-time purchasers in June 2011.

“A healthy market share of first-time buyers would be about 40 percent, so these figures show that tight inventory in the lower price ranges, along with unnecessarily tight credit standards, are holding back entry-level activity,” Yun said.

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