Home Sales Drop Unexpectedly

Previously owned home sales fell unexpectedly in June as tight supply and increasing rates for mortgages imperiled the real-estate market recovery in the U.S.

Purchases (ETSLTOTL) fell 1.2 percent to a 5.08 million annualized rate, the National Association of Realtors reported today in Washington. The median forecast of 79 economists surveyed by Bloomberg called for a 5.26 million pace. Demand was the second-strongest since November 2009 following May's downwardly revised 5.14 million rate.

First-time buyers are having difficulty finding properties for less than $100,000 as a lack of inventory pushes up property values, and higher mortgage rates are also starting to cool demand for more expensive houses in the West and Northeast, the real-estate agents group said. Federal Reserve Chairman Ben S. Bernanke last week said housing was one of the bright spots for growth and added policy makers will monitor the recent jump in borrowing costs to ensure it won't derail the nascent recovery.

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