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US home sales have that sinking feeling
By Alan Zibel |
July 23, 2010, Friday
|
Print Edition
Print Edition
SALES of previously occupied homes in the United States fell in June and are expected to keep sinking, indicating that the housing market's troubles are likely to drag on the economic recovery.
Sales fell 5.1 percent to a seasonally adjusted annual rate of 5.37 million, the US National Association of Realtors said yesterday.
The report counts home sales once a deal closes. Last month's report captured some buyers receiving federal tax credits of up to US$8,000 that boosted sales this year. Buyers initially had to close their purchases by June 30, but Congress extended the deadline to the end of September.
Since the tax credits expired, the number of people buying homes has fallen sharply, despite lower prices and the lowest mortgage rates in decades. The situation has been worsened by high unemployment, tight lending standards and rising foreclosures.
"The economy and the housing market are going to remain stagnant for a long time," said Sam Khater, senior economist at real estate data provider CoreLogic. "There's nothing that's going to propel sales anytime soon. It's all about jobs and income growth."
As sales have slowed, the supply of unsold homes on the market has risen 2.5 percent to nearly 4 million. That's a nearly nine-month supply at the current sales pace, the highest level since August. It compares with a healthy level of about six months.
Sales are likely to keep falling for three to four months, said Lawrence Yun, the Realtors' chief economist.
That would likely boost the supply of unsold homes to more than 10 months for the first time since the spring of last year. And it could push down home prices.
Sales fell 5.1 percent to a seasonally adjusted annual rate of 5.37 million, the US National Association of Realtors said yesterday.
The report counts home sales once a deal closes. Last month's report captured some buyers receiving federal tax credits of up to US$8,000 that boosted sales this year. Buyers initially had to close their purchases by June 30, but Congress extended the deadline to the end of September.
Since the tax credits expired, the number of people buying homes has fallen sharply, despite lower prices and the lowest mortgage rates in decades. The situation has been worsened by high unemployment, tight lending standards and rising foreclosures.
"The economy and the housing market are going to remain stagnant for a long time," said Sam Khater, senior economist at real estate data provider CoreLogic. "There's nothing that's going to propel sales anytime soon. It's all about jobs and income growth."
As sales have slowed, the supply of unsold homes on the market has risen 2.5 percent to nearly 4 million. That's a nearly nine-month supply at the current sales pace, the highest level since August. It compares with a healthy level of about six months.
Sales are likely to keep falling for three to four months, said Lawrence Yun, the Realtors' chief economist.
That would likely boost the supply of unsold homes to more than 10 months for the first time since the spring of last year. And it could push down home prices.
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