WASHINGTON — Sales of existing homes tumbled more sharply than expected in June, pushing activity down to the lowest level in more than a decade.
With an already huge glut of homes on the market, median prices fell compared with a year ago, and analysts predicted prices would keep falling until next spring as tighter credit, a slipping job market and rising foreclosures scare potential buyers away.
The National Association of Realtors reported Thursday that sales dropped by 2.6 percent last month to a seasonally adjusted annual rate of 4.86 million units, the slowest sales pace since the first quarter of 1998.
Earlier this month, Metrolist, the multiple listing service for the Denver metro area, reported that the number of properties sold in June increased 3.9 percent from May to 4,845. But the number was down 5.5 percent from the 5,129 sales in June 2007.
The national decline was more than double the 1 percent drop that economists had been expecting and left sales 15.5 percent below where they were a year ago.
The downward slide in sales depressed prices, too. The median price for a home sold in June dropped to $215,100, down by 6.1 percent from a year ago.
That was the fifth-largest year-over-year price drop on record.
Inventories of homes on the market rose by 0.2 percent to 4.49 million units, meaning it would take 11.1 months to exhaust the current backlog at the June sales pace, the second-highest level in the past 24 years. The glut of unsold homes is being made worse by a rising wave of foreclosures.
“California is on the leading edge of a housing recovery and that is because prices are falling fast in many areas and that is restoring affordability,” said Mark Zandi, chief economist at Moody’s .
But he predicted any rebound nationally will be slow in coming, reflecting the continued surge in foreclosures as many subprime mortgages reset to higher rates.
“It will be a long and painful end to this downturn, but at least we are beginning to see some signs of the end,” the economist said.
