Inventory of unsold homes jumps to 11-year high
WASHINGTON (MarketWatch) — The sale of existing U.S. homes sank 27.2% in July — the biggest one-month drop ever — largely because of the phase-out of a federal tax credit, according to an industry trade group.
The National Association of Realtors said existing-home sales fell to a seasonally adjusted annual rate of 3.83 million in July from 5.26 million the month before. Sales of single-family homes fell to the lowest rate in 15 years.
A year earlier, existing home sales totaled 5.14 million in July.
Inventories of unsold homes rose 2.5% to 3.98 million, representing a 12.5-month supply, the highest level since at least 1999. Read the full report on the NAR website.
Economists surveyed by MarketWatch forecast the pace of annualized sales to fall to 4.70 million. See our complete economic calendar and consensus forecast.
Many buyers took advantage of a temporary tax credit earlier this year to save up to $8,000, but they had to sign contracts before the end of April to qualify. As result, sales that might have taken place later in 2010 were squeezed into the first few months of the year.
Home purchases were expected to decline after the expiration of the tax credit and that is exactly what’s happened. After rising 7.6% in April, existing-home sales fell 2.2% in May and 7.1% in June.
Home sales are likely to remain sluggish over the next few months despite the lowest 30-year fixed-mortgage rates in the modern era. Rates slipped to a record-low 4.56% in July from 4.74% in June, according to Freddie Mac.
The latest data suggests the U.S. economy might be slowing again and the unemployment rate is stuck at 9.5%, near a 27-year high. Until the economy shows big improvement and hiring begins to pick up, the housing market will remain weak, economists say.
More…
0 comments:
Post a Comment