Home resales down in Las Vegas, GLVAR reports

U.S. sales of previously occupied homes slipped in June to a seasonally adjusted annual rate of 5.08 million but remain near a 3½-year high.

The National Association of Realtors said Monday that sales fell 1.2 percent last month from an annual rate of 5.14 million in May. The association revised down May’s sales, but they were still the highest since November 2009.

Despite last month’s dip, home sales have surged 15.2 percent from a year ago. Sales have recovered since early last year, buoyed by job gains and low mortgage rates.

Resales in Las Vegas declined both month to month and year over year, according to the Greater Las Vegas Association of Realtors.

Sellers unloaded 3,642 existing single-family homes, condos and townhomes in June, down 6.2 percent from 3,884 closings in May and off 7.7 percent compared with 3,945 sales in June of last year.

And unlike national averages, closings are down compared with the recession’s depths: In June 2009, the local market moved 4,702 existing properties, or 29.1 percent more homes than sold last month.

Sales agents have blamed a decline in foreclosures coming on the market since 2011 for slumping local resales.

Local new-home sales slipped month to month but jumped over the prior year. Builders closed on 637 units in June, according to local analysis firm Home Builders Research. That was an 8.5 percent drop from May but a 31.2 percent gain over June of last year.

Dennis Smith, president and CEO of Home Builders Research, said new-home demand has eased, with net sales per subdivision falling from 1 to 1.2 closings in early 2013 to an average of about 0.9 sales in the four weeks. He said factors that could be in play include hotter than usual weather, higher prices and rising interest rates.

Mortgage rates have surged in recent weeks over concern that the Federal Reserve could slow its bond-buying programs this year. The Fed’s bond purchases have helped keep long-term mortgage and other rates low.

Higher mortgage rates slowed sales last month of higher-priced homes in California and New York, the national Realtors group said.

The average rate on a 30-year fixed mortgage leaped to 4.46 percent by the end of June from 3.81 percent at the end of May. It was 4.37 percent last week.

The rate increase could hamper sales in coming months, economists said. But most expect housing to continue to recover, though at a slower pace.

“There’s little doubt the housing market slowed in the summer as mortgage rates rose,” Dan Greenhaus, chief global strategist at BTIG LLC, an institutional brokerage, told clients. “Housing is still expected to grow and contribute to economic output. It just may not be at the pace we’ve seen of late.”

Lawrence Yun, chief economist of the National Association of Realtors, told local Realtors at a luncheon Friday at the Gold Coast that interest rates are unlikely to hamper sales significantly. For one thing, nearly 60 percent of sales in Las Vegas are cash buys and immune to higher borrowing costs, Yun said. Plus, today’s rates remain well below historic averages, he said.

“Mortgage rates of 4.5 percent are fairly attractive. Consumers wish they had that 3.5 percent rate, but I think they recognize that was a bonus rate,” he said. “They are not deterred by 4.5 percent. So rising interest rates will not cool momentum.”

Sales of previously occupied homes nationwide in June reflect contracts that were signed mostly in April and May, when mortgage rates were lower. Rising rates can cause some signed contracts to fall through if buyers no longer qualify for mortgages at higher rates.

The one factor probably most holding back sales is a limited supply of houses available. Though more sellers put their homes on the market in June, the supply remained unusually low — nearly 8 percent less than a year ago.

At the current sales pace, the number of houses for sale nationwide would be exhausted in 5.2 months. That is below the six-month supply consistent with a healthy housing market.

Supply shortages are even more stark in Las Vegas, where resale inventory is about 1.3 months, according to economics research firm Applied Analysis. And that’s despite a 16.1 percent jump in available single-family units from May to June, the local Realtors’ association reported.

Another concern is that first-time buyers, who usually drive healthy markets, aren’t participating as much in the current recovery. They made up only 29 percent of buyers in June, below the 40 percent that is typical. Since the housing bubble burst more than six years ago, banks have imposed tighter credit conditions and required larger down payments. That has made it harder for first-time buyers to qualify for mortgages.

Still, mortgage rates remain relatively low and home prices remain affordable. And higher mortgage rates could encourage some potential buyers to purchase houses before rates rise further.

The strength in housing this year has offset weaknesses elsewhere in the economy, such as manufacturing and business investment. Rising home sales tend to lead to more spending at furniture and home supply stores.

Homebuilders have stepped up construction in the past year, creating more construction jobs. In June, they applied for permits to build single-family houses at the fastest pace in five years.

Local builders are jumping in the game as well, with permits soaring 30 percent year over year in the first half of 2013, to 3,770 permits pulled, according to Home Builders Research.

Still, the numbers are way off their pre-recession averages, when builders pulled 3,000 to 4,000 permits a month in Southern Nevada.

The Associated Press contributed to this report.