business

Home sales rise in May (but only a little)

Existing home sales rose 2.4% in May — the second consecutive monthly increase, the National Association of Realtors said today. But the May level — adjusted for seasonal variations — was lower than some economists had predicted.

The important thing here is that home sales aren’t falling, indicating that a bottom might be near. Michelle Meyer, economist with Barlays Capital in New York, told me that she thinks the increase is good news. But she also pointed out that the sales that closed in May went into contract a month or two earlier. So the rising interest rates have yet to be factored into the sales data.

Interest rates for a 30-year fixed mortgage have increased from 5.13% on April 1 to 5.76% on June 17, according to Bankrate.com.

“It reflects housing conditions in April, prior to the runup in mortgage rates,” Meyer said. “I don’t know how it will respond to the jump in mortgage rates in the last month.”

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