National Trend ~ Housing Slowdown Continues in June

Sales of existing homes fell in June for the eighth time in the past 10 months while home prices edged up at the slowest pace in more than a decade _ more signs that the housing market has slowed dramatically.

The National Association of Realtors reported Tuesday that sales of previously owned homes and condominiums dropped 1.3 percent in June to a seasonally adjusted annual rate of 6.62 million units.

Home Sales Down / Prices Up Slightly

The 1.3 percent decline in sales… represented the third drop in a row and the eighth decline in the past 10 months as the nation’s once-booming housing market has shifted to a slower pace in the face of rising mortgage rates.

The median price of a home sold last month was $231,000. That was up 0.9 percent from June 2005 and represented the smallest year-over-year price gain since May 1995.

The inventory of unsold homes rose to a new record of 3.725 million units, which is a 6.8 months supply at the June sales pace. That is the longest period required to exhaust the overhang of unsold homes in nearly nine years.

Condo Sales Down

For June, sales of condominiums dropped 5.5 percent to an annual rate of 805,000 units.

Further Decline Expected

Analysts said the growing level of unsold homes will further depress prices in coming months and add to the slowdown in sales.

‘With interest rates still rising and job growth slowing, the slowdown in sales will continue,’ predicted Patrick Newport, an economist at Global Insight, an economic consulting firm. He forecast that existing home sales would decline by 8 percent this year and 9 percent in 2007.

David Lereah, chief economist for the National Association of Realtors, said he believed price weakness will continue as sellers start cutting their asking prices in the face of weaker demand and rising inventories.

Source: Martin Crutsinger, Associated Press