Existing home sales declined in July at a faster clip than expected, pushing the inventory of unsold homes on the market to record highs, according to a report today from the National Association of Realtors.
Sales of existing homes and condominiums dropped by 4.1 percent in July from June to a seasonally adjusted annual rate of 6.33 million – the slowest rate since January 2004.
Single family home prices are appreciating at a 1.5 percent pace, compared to a 15 percent pace in 2005. More than 7.3 months of sales are needed to clear the current inventory, the highest rate seen since 1993.
“Many potential home buyers have been on the sidelines, some ‘kicking the tires,’ but mostly waiting for sellers to compromise on prices and terms,” said David Lereah, NAR’s chief economist.
Sellers appears to be dropping their prices in many areas, reflected in the lower appreciation rates, which could boost sales. But it could take many months for noticeable appreciation to return, Lereah said.
Metro Denver-area home sales and prices weren’t part of today’s report. But for the first half of the year, existing home sales are down 7.5 percent compared to a year ago, according to The Genesis Group of Englewood.
The supply of resale homes hit 7.2 months in June, up from 5.6 months in the second quarter of 2005. Existing single family home prices increased 3.4 percent over the year, while condos and townhomes were up 1.4 percent.
“We are seeing a decline in home sales, but not home prices,” said Mike Rinner, a senior analyst with Genesis. “We didn’t have a lot of hype in home prices here.”
