Home Sales Pace

Sales of existing U.S. homes continued to fall sharply in July, following a mild drop in June, all as a result of the recently ended federal tax credit, according to the National Association of Realtors.

Total existing homes sales dropped off by 27.2 percent to a seasonally adjusted annual rate of 3.83 million units, down from June's downwardly revised 5.26 million, and down 25.5 percent over July 2009 figures. The current pace is slower than anything recorded in the NAR's 11-year home-sales survey.

Even so, the NAR has a positive spin for the dramatic drop.

"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. "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."

Yun added that annual sales are still expected to reach 5 million this year, when annual sales have averaged just 4.9 million for the last 20 years.

The national median existing-home price fell from June but rose over the previous year. The new median price in July was $182,600, down from $183,700 the month before, while up 0.7 percent from the July 2009 price of $178,400.

The NAR defines existing homes as all previously-owned single-family homes, townhouses, condominiums, and co-ops. The group "seasonally adjusts" the sales numbers to factor in things like inclement weather, school sessions, winter holidays, etc to smooth out the trends. The NAR also describes its sales data based on an annual pace. The monthly figure represents the total number of housing units that would be sold in one year if the current rate were to continue unchanged.

Sales Pace by Region

Every region of the country shared in the double-digit losses during July. The Midwest felt the hardest blow with a 35.0 percent decrease in sales to a seasonally adjusted pace of 800,000, a figure that is 33.3 percent below last year's pace.

The Northeast saw the next biggest decline with a 29.5 percent fall to an annual pace of 620,000. Sales are down 30.3 percent over the same time last year.

In the West, sales sank 25.0 percent to 870,000 in July, and fell 23.0 percent from the year before.

Sales in the South plunged down to an annual pace of 1.54 million, a 22.6 percent decrease from June, and a 19.8 percent drop from July 2009.

Home Prices

The median home price, the point at which half of all homes are sold for more and half are sold for less, rose in two regions and fell in the other two.

The median price in the Northeast grew to $263,800 from $244,300 in June, and it rose 4.8 percent from the previous year.

In the Midwest, the price fell to $151,600, down from $163,600 the month before and down 2.8 percent from July 2009.

The South had its price decline to $156,300, from $163,600 in June. That was down 3.3 from one year earlier.

The median price in the West was $224,800, an increase from $221,800 the month before and up 3.3 percent from the same time in 2009.

Inventory

The number of existing-homes for sale in July rose 2.5 percent to 3.98 million units, representing a 12.5-month supply at the current sales rate. In June, there was only an 8.9-month supply.

Next Report

Data for August existing home sales, prices, and inventory will be available at the end of September.