Existing home sales fell 5.1% in June, with 5.37 million single-family homes, townhomes, condos, and co-ops sold compared to 5.66 million in May, the National Association of Realtors (NAR) reported in a Thursday, July 22, news release.
Sales are 9.8% higher than they were in June 2009, when 4.89 million units were sold, according to the NAR's June existing home sales report. However, home sales are expected to fall sharply later in 2010 after the effects of a springtime tax credit wear off and joblessness persists nationwide.
Analysts' consensus was for a 10% drop in sales to 5.10 million units.
NAR Chief Economist Lawrence Yun said in the news release that the housing market in June showed uncharacteristic yet understandable swings as first-time home buyers responded to the $8,000 federal tax credit that ended April 30. June real estate closings continued to experience the tax credit's effects as approximately 180,000 home buyers who signed a contract in good faith completed their transactions in June due to delays in the mortgage process.
"June home sales still reflect a tax credit impact with some sales not closed due to delays, which will show up in the next two months," Yun said. "Broadly speaking, sales closed after the home buyer tax credit will be significantly lower compared to the credit-induced spring surge. Only when jobs are created at a sufficient pace will home sales return to sustainable healthy levels."
According to Freddie Mac, the national average commitment rate for a 30-year, fixed-rate mortgage fell to a record low 4.74% in June from 4.89% in May. The rate was 5.42% in June 2009. Distressed homes were at 32% of sales last month, compared with 31% in May and 31% in June 2009.
Total housing inventory at the end of June rose 2.5% to 3.99 million existing homes available for sale, an 8.9-month supply at the current sales pace, up from an 8.3-month supply in May.
"The supply of homes on the market is higher than we'd like to see. But home prices are still holding their ground because prices had already overcorrected in many local markets," Yun said. Raw unsold inventory remains 12.7 percent below the record of 4.58 million in July 2008.
The national median existing-home price for all housing types was $183,700 in June, which is 1.0% higher than a year ago. Regionally, existing-home sales in the Northeast rose 7.9% versus a month ago although the median price for a home was down 1.2% from a year ago at $244,300. Sales in the Midwest dropped 7.5%, with prices flat at $155,900. In the South, prices also held flat at $163,600 as sales fell 6.5%. In the West, sales dropped 9.3% and prices were up 1.5% at $221,800.
Read a story about May's existing home sales from the archives of InvestmentAdvisor.com.