Nicholas Yulico
Existing-home sales fell a steeper-than-expected 4.1% in July as the inventory of houses on the market hit a record high, signaling further trouble for homebuilders trying to sell new homes.
The National Association of Realtors said Wednesday that total existing home sales came in at a seasonally adjusted annual rate of 6.33 million for July, the lowest sales in two years. The number was below the downwardly revised pace of 6.6 million in June, and 11.2% below the 7.13 million mark in July 2005. Economists surveyed by Reuters expected an annual sales rate of 6.55 million homes for July. The national median existing-home price for all housing types was $230,000 in July, up 0.9% from a year earlier. The median is a typical market price where half of the homes sold for more and half sold for less The inventory of homes for sale spiked to a whopping 3.86 million units, which represents a 7.3-month supply at the current sales pace. "Inventories were up almost 40% higher from year-ago levels, and this is an environment of slowing sales," says Phillip Neuhart, an economic analyst with Wachovia. Wachovia predicts a 20% decline in sales through the end of 2007 as compared to the end of 2005.
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