Mortgage rate fears push record used-home sales

Associated Press

WASHINGTON - Sales of existing homes hit an all-time high last month as rising mortgage rates triggered a rush by fence-sitters to close deals before rates went higher.

Analysts predicted that even if sales slow as expected in coming months, 2004 will still be a banner year for housing sales.

The June increase, which was the fifth consecutive gain, pushed the annual rate of existing home sales to 6.95 million units, beating the old record set in May of 6.81 million units, the National Association of Realtors reported.

Every region of the country either set or tied its record for sales activity.

The median price for an existing home sold in June was $191,800, up 5.2 percent from the May median price of $182,400. The median price is the midpoint where half the homes sold for more and half for less.

However, the strength in housing did not lift spirits on Wall Street, which suffered another down day as investors worried about the outlook for the economy and corporate earnings.

The Dow Jones industrial average fell 0.30, or nearly flat, at 9,961.92. It was the Dow's lowest close since May 20.

The Nasdaq and Standard & Poor's 500 both closed at new lows for the year.

The Standard & Poor's 500 was down 2.13, or 0.2 percent, at 1,084.07, its lowest close since Dec. 17. The Nasdaq shed 10.07, or 0.5 percent, to 1,839.02, its lowest point since Oct. 2.

On the New York Stock Exchange, declining issues outnumbered advancers by nearly 5-to-2 as preliminary consolidated volume came to 1.71 billion shares, compared with 1.6 billion on Friday.

The Russell 2000 index of smaller companies was down 5.74, or 1.1 percent, at 533.49.

Bond prices fell after the home sales report on fears about the pace of economic recovery and possibly quicker interest rate increases. The benchmark 10-year Treasury note fell point, or $4.38 per $1,000 in face value. Its yield, which moves in the opposite direction, rose to 4.49 percent compared with 4.43 percent late Friday.

Late in the day, the euro was trading around $1.2146, above $1.2104 late Friday in New York. The dollar also slipped to 109.85 yen from 110.09 yen.

Overseas, Japan's Nikkei stock average fell 0.3 percent, France's CAC-40 slid 1 percent for the session, Britain's FTSE 100 closed down 0.9 percent, and Germany's DAX index fell 1.2 percent.

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