A view of a home for sale in Los Angeles in this February 24, 2010 file photo.
The National Association of Realtors (NAR) reported that sales of previously occupied homes fell 27.2 percent to a seasonally adjusted annual rate of 3.83 million units in July, the lowest level since May 1995, from a downwardly revised 5.26 million in June.
Economists expected existing home sales in July to decline to 4.75 million from 5.37 million in June.
"Home sales were eye-wateringly weak in July and suggest that the double-dip in house prices that we warned about at the start of the year is just around the corner," said Paul Dales, U.S. economist at Capital Economics.
"Overall, it is becoming abundantly clear that the housing market is undermining the already faltering wider economic recovery. With the increasingly inevitable double-dip in prices yet to come, things could yet get a lot worse," said Dales.
Economists expected existing home sales in July to decline to 4.75 million from 5.37 million in June.
"Home sales were eye-wateringly weak in July and suggest that the double-dip in house prices that we warned about at the start of the year is just around the corner," said Paul Dales, U.S. economist at Capital Economics.
"Overall, it is becoming abundantly clear that the housing market is undermining the already faltering wider economic recovery. With the increasingly inevitable double-dip in prices yet to come, things could yet get a lot worse," said Dales.
Total housing inventory at the end of July rose 2.5 percent to 3.98 million existing homes available for sale, representing a 12.5-month supply at the current sales pace, up from an 8.9-month supply in June.
Year-over-year, July existing home sales fell 25.5 percent from 5.14 million last year.
“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,” said Lawrence Yun, NAR's chief economist. “Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September.”
To receive a government incentive worth as much as $8,000, buyers must have signed contracts by the end of April. Deadline for the deals needed to complete by June 30 was extended to September 30.
Yun said the pace of a sales recovery could pick up quickly given the rock-bottom mortgage interest rates and historically high housing affordability conditions, provided the economy consistently adds jobs.
Year-over-year, July existing home sales fell 25.5 percent from 5.14 million last year.
“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,” said Lawrence Yun, NAR's chief economist. “Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September.”
To receive a government incentive worth as much as $8,000, buyers must have signed contracts by the end of April. Deadline for the deals needed to complete by June 30 was extended to September 30.
Yun said the pace of a sales recovery could pick up quickly given the rock-bottom mortgage interest rates and historically high housing affordability conditions, provided the economy consistently adds jobs.
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