WASHINGTON — Home resales plunged by a record 27 percent in July as the effects of a government tax credit waned, showing that a lack of jobs threatens to undermine the U.S. economic recovery.
Purchases plummeted to an annual pace of 3.83 million, the lowest in a decade of record-keeping and worse than the most pessimistic forecast of economists surveyed by Bloomberg News, figures from the National Association of Real tors showed Tuesday in Washington. Demand for single- family houses dropped to a 15-year low, and the number of homes on the market swelled.
The story is the same in metro Denver, where the number of homes sold in July plunged 26.6 percent compared with the same month a year ago, according to an analysis of Metrolist data.
There were 3,259 homes sold in the metro area last month, compared with 4,440 for the same period in 2009.
“Today’s data do not bode well for home prices,” said Michelle Meyer, a senior economist at BofA Merrill Lynch Global Research in New York. “There is a decent chance we reach a new bottom for home prices. There’s going to be a prolonged, painful drop.”
The pace of home resales is the slowest since comparable records began in 1999. The agents group revised June sales down to 5.26 million from a previously reported 5.37 million.
Economists had projected sales would fall 13 percent. Estimates in the Bloomberg survey of 74 economists ranged from 3.96 million to 5.3 million. Previously owned homes make up about 90 percent of the market.
Denver Post staff writer Margaret Jackson contributed to this report.
