Sales of Existing Single-Family Homes Plunge to 1995 Level

Sales of existing homesSales of existing homes plummeted 27 percent in July to a seasonally adjusted rate of 3.83 million units, compared to a downwardly revised 5.26 million units in June, according to the National Association of Realtors.
Sales – representing existing single-family homes, townhomes, condominiums and co-ops — were down 25.5 percent compared to July 2009.
Sales of existing single family homes – which account for most transactions — are at the lowest level since May of 1995.
The July figures were expected, meeting most Wall Street predictions.
Sales of both existing and new homes have been sliding since the April 30 expiration of homebuyer tax credits and a slower economic recovery hampered by persistently highly unemployment and anemic growth in private job growth.
“Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired. Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September,” said Lawrence Yun, NAR chief economist.
On the positive side, mortgage rates have been setting new lows for two months. Any pick up in the economic recover would boost the housing market, Yun said.
“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. To place in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years,” Yun said.
The median existing-home price for all housing types was $182,600 in July, up 0.7 percent from a year ago, NAR said. Distressed home sales are unchanged from June, accounting for 32 percent of transactions in July – 31 percent in July 2009.
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