Home Sales Plunge in July

By:: Peter King | August 24, 2010

Existing home sales plummeted in July, dropping 27.2 percent to an annual rate of only 3.83 million, according to the National Association of Realtors.

The decline was far steeper than analysts had expected. Various surveys of economists prior to this morning’s report predicted a decline 12-15 percent.

The decline would have been even larger, except that June’s sales rate was revised downward to 5.26 million, from 5.37 million previously reported. Sales rates are seasonally adjusted.

The July annual rate of sales is the lowest reported by the NAR since it began tracking the monthly data in 1999. It’s the third consecutive monthly decline reported since the end of the federal homebuyer tax credit at the end of April and represents a 25 percent annual decline from July 2009.

Lawrence Yun, NAR chief economist, said sales will likely remain depressed for several months to come, though he still held out hope for a rebound.

“Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired,” Yun said. “Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September. However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs.”

Oddly enough, median home prices increased despite the sharp decline in actual sales. The median home purchase price in July was $182,600, up 0.7 percent from one year earlier.

Despite the big drop in sales over the past three months, total sales for the year are still expected to be close to the average of the last 20 years, due to strong sales spurred by the tax credit early in the year. Yun predicted total existing home sales for 2010 would be around 5 million units, compared to an average of 4.9 million over the past 20 years.

Call For Rates

800-419-1494

Speak to a lender now.

We will match calls to our toll free number with our network of lenders.

See Today's Rates

National Rates

Loan Type	Today	+/-
30 yr fixed	3.72
15 yr fixed	3.03
5/1 ARM	2.75

Rates may contain points

Compare Rates »

Browse Mortgage Rates

Featured Guides

Browse our comprehensive guides to popular topics related to mortgage and personal finance.

Real Estate Calculators

Mortgage Loan Directory and Information, LLC or Mortgageloan.com does not offer loans or mortgages. Mortgageloan.com is not a lender or a mortgage broker. Mortgageloan.com is a website that provides information about mortgages and loans and does not offer loans or mortgages directly or indirectly through representatives or agents. We do not engage in direct marketing by phone or email towards consumers. Contact our support if you are suspicious of any fraudulent activities or if you have any questions.

Mortgageloan.com is a news and information service providing editorial content and directory information in the field of mortgages and loans. Mortgageloan.com is not responsible for the accuracy of information or responsible for the accuracy of the rates, APR or loan information posted by brokers, lenders or advertisers.