Home Resales Drop a Record 27% In July
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Sales of previously existing homes dropped more than expected in July to their lowest pace in 15 years, another sign that the economic recovery is losing steam.
The National Association of Realtors said Tuesday that sales of existing homes dropped a record 27.2 percent from June to an annual rate of 3.83 million units, marking the lowest level since May 1995. The pace from June was revised down to 5.26 million units.
Economists had expected existing home sales to drop 12 percent to a pace of 4.70 million units in July, from the previously reported pace of 5.37 million units in June.
"Even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010 because of healthy activity in the first half of the year,” Lawrence Yun, NAR chief economist, said To place in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years."
The median price for existing homes in July was $182,600, up 0.7 percent from the same time last year.
"Thanks to the home buyer tax credit, home values have been stable for the past 18 months despite heavy job losses," Yun said. "Over the short term, high supply in relation to demand clearly favors buyers. However, given that home values are back in line relative to income, and from very low new-home construction, there is not likely to be any measurable change in home prices going forward."
The total housing inventory at the end of July increased 2.5 percent to 3.98 million existing homes for sale, which represents a 12.5-month supply at the current sales pace.
The Midwest saw the largest drop, falling 35 percent in July. Sales in the Northeast fell 29.5 percent, the West was down 25 percent and the South dropped 22.6 percent.
The National Association of Realtors said Tuesday that sales of existing homes dropped a record 27.2 percent from June to an annual rate of 3.83 million units, marking the lowest level since May 1995. The pace from June was revised down to 5.26 million units.
Economists had expected existing home sales to drop 12 percent to a pace of 4.70 million units in July, from the previously reported pace of 5.37 million units in June.
"Even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010 because of healthy activity in the first half of the year,” Lawrence Yun, NAR chief economist, said To place in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years."
The median price for existing homes in July was $182,600, up 0.7 percent from the same time last year.
"Thanks to the home buyer tax credit, home values have been stable for the past 18 months despite heavy job losses," Yun said. "Over the short term, high supply in relation to demand clearly favors buyers. However, given that home values are back in line relative to income, and from very low new-home construction, there is not likely to be any measurable change in home prices going forward."
The total housing inventory at the end of July increased 2.5 percent to 3.98 million existing homes for sale, which represents a 12.5-month supply at the current sales pace.
The Midwest saw the largest drop, falling 35 percent in July. Sales in the Northeast fell 29.5 percent, the West was down 25 percent and the South dropped 22.6 percent.
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