Existing home sales dropped 27.2 percent nationally to a seasonally adjusted annual rate of 3.83 million units in July from a downwardly revised 5.26 million in June, and are 25.5 percent below the 5.14 million-unit level in July 2009, according to a report issued today by the National Association of REALTORS® (NAR). The report attributed the drop largely to the expiration of the federal home buyer tax credit and concern about the strength of the economic recovery.
NAR chief economist, Lawrence Yun, said a soft sales pace likely will continue for a few additional months. “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,” he said. “However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs.
“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 national median existing-home price for all housing types was $182,600 in July, up 0.7 percent from a year ago. Distressed home sales are unchanged from June, accounting for 32 percent of transactions in July; they were 31 percent in July 2009.
Total housing inventory at the end of July increased 2.5 percent to 3.98 million existing homes available for sale, which represents a 12.5-month supply at the current sales pace, up from an 8.9-month supply in June. Raw unsold inventory is still 12.9 percent below the record of 4.58 million in July 2008.
Single-family home sales dropped 27.1 percent to a seasonally adjusted annual rate of 3.37 million in July from a pace of 4.62 million in June, and are 25.6 percent below the 4.53 million level in July 2009; they were the lowest since May 1995 when the sales rate was 3.34 million. The median existing single-family home price was $183,400 in July, which is 0.9 percent above a year ago.
Regionally, existing-home sales in the West fell 25.0 percent and are 23.0 percent below a year ago. The median price in the West was $224,800, up 3.3 percent from July 2009.
But in the West, sales in the price ranges typical of San Francisco properties was down by only 11.9 percent for properties selling for $550 to 750 thousand, down 6.8 percent for properties selling for $750 thousand and $1 million and up 7.8 percent for properties selling for properties above $1 million price.
Homeowners whose loan payments were reduced in 2009 are falling back into default less often than those who got modifications in 2008.
