July 24th, 2010 12:01 AM by Lehel S.
The U.S. market for existing housing sales softened less than expected last month, with purchases of previously owned homes sliding 5.1%, a national trade group said Thursday.Real estate analysts, who had predicted a decline of more than 7% on average, had long warned that sales would drop after a federal tax credit that had fueled home buying in the spring expired April 30. Buyers who qualified for the credit of as much as $8,000 on the purchase of a home have until Sept. 30 to close their deals.Many economists believe that sales will drop further in the coming months.
"We remain of the view that near-record affordability will start to lift sales again in the fall, but the next few months will be very weak," said Ian Shepherdson, chief U.S. economist for research group High Frequency Economics. "Prices will likely slip too."The National Assn. of Realtors' data are based on the trade group's proprietary multiple listing service and are reported as a monthly estimate that is adjusted for seasonal variations. The seasonally adjusted annual rate for June was 5.4 million units. That was a 5.1% drop from May, but a 9.8% increase from June 2009.The national median sales price for all existing housing units was $183,700 in June, a 2.3% increase from the previous month and a 1% increase from June 2009, the Realtors group said. The median is the price at which half the homes sold for more and half for less.A housing inventory of nearly 4 million previously owned homes remained available for sale at the end of June, a 2.5% increase from May. That represents a 9-month supply at the current sales pace.Major financial institutions also have stepped up foreclosure activity this year, which will add more inventory to the market in coming months. Homes sold through foreclosures typically sell at a discount, putting pressure on home prices.