U.S. home resales fell in September and prices rose at their slowest pace in five months, the latest signs higher mortgage rates were taking some edge off the housing market recovery.
The National Association of Realtors said on Monday home sales fell 1.9% to an annual rate of 5.29 million units. August's sales pace was revised down to 5.39 million units from the previously reported 5.48 million units.
Economists polled by Reuters had expected home resales to fall 2.9% to a 5.30-million-unit rate.
The NAR said a combination of high home prices, barely rising salaries and higher mortgage rates was weighing down on affordability, which hit a five-year low in September.
The Realtors group said home resales had probably peaked in July and August. The drop in homes resales adds to other data that have suggested the high borrowing costs are starting to slow the housing market recovery.
Contracts to buy previously owned houses declined in August for a third straight month. Confidence among homebuilders fell in October for the second consecutive month, while loans to buy a home have declined for the past three weeks.
Interest rates have risen sharply since May on expectations that the Federal Reserve would start cutting back on its monthly bond purchases this year, with the 30-year fixed mortgage rate surging a full percentage point.
It rose to 4.49% in September, the highest since July 2011, from 4.46% in August, according to Freddie Mac. Still, mortgage rates remain low by historical standards.
The Fed surprised markets last month by sticking to its monthly $85-billion U.S. bond buying program, seeking more evidence of strong economic growth.
Also pointing to a moderation in the pace of the housing market recovery, the median price for a previously owned home rose 11.7% from a year ago to $199,200. That was the slowest pace of increase in five months.
While overall home sales rose 10.7% from a year ago, that increase was also the smallest in five months.
