"The real estate market in June experienced the confluence of what is traditionally the peak selling season and consumers' responses to a changing interest rate climate," said the association's president, Ann Pettijohn. "As mortgage rates began to increase, consumers' expectations of even higher rates in the future pushed many off the fence and into the market."

The median price of an existing, single-family detached home in California during June 2004 was $469,170, a 25.3 percent increase over the revised $374,540 median for June 2003, the association reported. The June 2004 median price increased 1.2 percent compared to a revised $463,690 median price in May.

"Year-to-date sales have increased 7.4 percent compared to 2003," said Leslie Appleton-Young, California Association of Realtors vice president and chief economist. "We're continuing to see double-digit sales increases in most regions of the state, while the median price increased by more than 30 percent in over half of the regions within the state."

The median number of days it took to sell a single-family home was 25 days in June 2004, compared to 28 days (revised) for the same period a year ago.

Statewide, the 10 cities and communities with the highest median home prices in California during June 2004 were: Beverly Hills, $1,487,500; Los Altos, $1,325,000; Malibu, $1,287,500; Saratoga, $1,265,000; Manhattan Beach, $1,252,500; Laguna Beach, $1,250,000; Palos Verdes Estates, $1,250,000; Coronado, $1,100,000; Newport Beach, $1,090,000; San Marino, $1,078,000; Del Mar, $1,035,000.

Thirty-year fixed mortgage interest rates averaged 6.29 percent during June 2004, up from 5.23 percent in June 2003, according to Freddie Mac. Adjustable mortgage interest rates averaged 4.10 percent in June 2004 compared to 3.52 percent in June 2003.

National Association of Realtors President Walt McDonald said mortgage interest rates continue to surprise the market. "The 30-year fixed-rate mortgage has come back down and has been hovering around 6.0 percent over the last few weeks," he said. "Considering most forecasts projected mortgage interest rates to gradually rise, this could keep the housing market from taking as much of a breather as we have anticipated—2004 is well on the way to setting an annual record."

David Lereah, National Association of Realtors chief economist, said last month's performance is close to the peak for the housing market. "Although we've been expecting sales to ease, it's clear the market has tremendous momentum," he said. "The improving job market and higher consumer confidence are feeding into a large demographic demand for housing. It's unlikely that we'll top the pace in June, but home sales remain very healthy and are likely to stay quite strong, even with some easing expected in the second half of the year."

Information provided in this column is presented by the Realtor members of the Silicon Valley Association of Realtors at www.silvar.org. Send questions on any topic to jnewton@jnpr.com.