Home Sales Down

Total housing inventory at the end of July increased 2.5 percent to 3.98 million existing homes available for sale, which represents a 12.5-month supply at the current sales pace, up from an 8.9-month supply in June.

According to Lawrence Yun, The National Association of Realtors chief economist, “Over the short term, high supply in relation to demand clearly favors buyers. However, given that home values are back in line relative to income, and from very low new-home construction, there is not likely to be any measurable change in home prices going forward.”

Home sales are at the lowest level since the total existing-home sales series launched in 1999, and single-family sales, which accounted for the bulk of transactions, are at the lowest level since May of 1995.

Sales of new homes unexpectedly sank 12.4 percent in July to the lowest point since government records starting being kept in 1963. It underscored continued weakness in the housing market, which tanked after the expiration this spring of a tax break for homebuyers who were already facing a stagnant job market.

The Commerce Department said Wednesday that new single-family houses in July were sold at a seasonally adjusted annual rate of 276,000 units. It marked a 32.4 percent drop from the same month a year ago.