Home Resales Slump in June as Mortgage Rates Spike

Sales of existing homes dropped in June to a 5-year low because of rising mortgage rates and stricter lending standards. Home resales dipped 3.8% from a 5.98 million annual rate in May to a 5.75 million rate now. "The housing recession looks far from over," an economist tells the Wall Street Journal.

Freddie Mac reported a spike in the average 30-year mortgage rate to 6.66% in June, up from 6.26% in May. That's contributing to the dismal housing market, which has stunted economic growth in the US for six consecutive quarters. But on a positive note, points out another economist, inventories of homes fell 4.2% at the end of June to 4.20 million, and median prices rose for the first time in 11 months.