Existing home sales fell more than expected in May after the federal tax credit for home buyers ended April 30, the National Association of Realtors (NAR) reported on Tuesday, June 22. The 5.66 million single-family houses, townhomes, condos and co-ops purchased represented a 2.2% drop-off in sales versus the 5.79 million units sold in April.
Compared to May 2009, the number of existing homes sold remained high, with May 2010 closings 19.2% above the 4.75 million units sold a year ago, according to the NAR report. At the housing market’s height in September 2005, however, sales peaked 22% higher, at 7.25 million.
“We are witnessing the ongoing effects of the home buyer tax credit, which we’ll also see in June real estate closings,” said NAR chief economist Lawrence Yun. “However, approximately 180,000 home buyers who signed a contract in good faith to receive the tax credit may not be able to finalize by the end of June due to delays in the mortgage process, particularly for short sales.”
In the real estate market, a short sale is a sale where the proceeds are not sufficient to cover the balance owed on the original mortgage.
Other economists were even less upbeat about the home sales news.