Home Sales Sag as Contract Cancellations Cited

 

The decline in sales was most strongly felt in the condominium and cooperative sectors which were down 7 percent to a seasonally adjusted annual rate of 530,000 from 570,000 in May and down 18 percent from one year earlier when the rate was 646,000.

An increase in contract cancellations caused a decline in the sales of existing homes in June.  Still, according to the National Association of Realtors®, there was a slight rise in home prices.

Existing home sales, including sales of single family houses, townhomes, condominiums, and cooperatives, declined 0.8 percent from May figures and 8.8 percent from the numbers in June 2010, a month when homebuyers were scrambling to complete purchases under the deadline to qualify for federal tax credits. Sales last month were at a seasonally adjusted annual rate of 4.77 million compared to 4.81 million in May and 5.23 million one year earlier.

Single-family home sales were unchanged at a seasonally adjusted annual rate of 4.24 million in June, but are 7.4 percent below the 4.58 million pace in June 2010.  

Sales were down, in part, because of a decline in first time buyers which represented 31 percent of purchases in May compared to 36 percent in June and 43 percent in June 2010 when the tax credit had enticed a lot of first-time buyers into the market. First time buyers make up a large part of the market for condos and coops. Repeat buyers accounted for 50 percent of sales, up from 45 percent in May. 

Sales in the Midwest and South regions rose 1 percent and 0.5 percent respectively from May while sales in the Northeast were down 5.2 percent and in the West 1.7 percent. The median price in the Northeast was $261,000, up 3.1 percent from a year earlier. 

In the Midwest the price was down 5.3 percent to $147,700; and in the South there was a small decrease of 0.1 percent to 159,100. In the West, however the median price was up 9.5 percent year-over-year to $240,000.

– Courtesy of Mortgage News Daily, Jann Swanson