(Existing-home sales winners & losers article updated with additional commentary and closing stock prices.)
NEW YORK (
) -- Stocks in the homebuilder sector were mixed Tuesday on word that
The National Association of Realtors said existing-home sales fell 27.2% in July to a seasonally adjusted annual rate of 3.83 million units. Economists had expected the figure to come in at 4.72 million units,
compared with a downwardly revised 5.26 million in June
"The numbers are worse than I thought they would be," ConvergEx Group chief market strategist Nicholas Colas told
. "The threat of a double dip seems to grow with every economic data point."
Investors watching the homebuilder sector voiced mixed opinions. The
SPDR S&P Homebuilders
, an exchange-traded fund that tracks the homebuilder sector, fell sharply after July's existing-home sales data was released, reached into positive territory throughout much of the day and then closed lower by 0.6%. The
iShares Dow Jones US Home Construction
also dipped in early trading but managed to close with a gain of 0.2%.
Leading the sector lower were shares of
. Brookfield closed down 4.9%, Comstock 4.6% and Beazer 2%.
Tuesday's gainers included
lost 0.4% while shares of
were flat for the day.
The NAR report said July's existing-home sales figures were at the lowest level since the total existing-home sales series launched in 1999. Single-family homes were at the lowest level since May of 1995, plummeting 27.1% in July to a seasonally-adjusted annual rate of 3.37 million, from a pace of 4.62 million in June, and 25.6% below year-earlier levels. Single-family homes account for the bulk of all existing home sales.
The housing market has been under tremendous pressure for some time, and demand fell further after the
. Most analysts agree the situation is likely to get worse before it gets better.
NAR chief economist Lawrence Yun was not quite as pessimistic.
"Thanks to the home buyer tax credit, home values have been stable for the past 18 months despite heavy job losses," he said. "Over the short term, high supply in relation to demand clearly favors buyers. However, given that home values are back in line relative to income, and from very low new-home construction, there is not likely to be any measurable change in home prices going forward."
Even so, he said soft home sales will likely continue for several more months.
"Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired. Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September," he said. "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.
"Even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010 because of healthy activity in the first half of the year," Yun continued. "To place in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years."
if another round of homebuyer tax credits would help or hurt the economy. Readers of
overwhelmingly agreed that
and the entire economy. Out of 207 votes, 62.3% respondents voted yes while 37.7% vote no, viewing another tax credit as simply barking up the wrong tree.
The housing market saw sales ramp up in March and April as consumers rushed to take advantage of tax credits that offered as much as $8,000 for first-time homebuyers and $6,500 for repeat buyers. Following the expiration of those credits on April 30, the market saw a dramatic decline in demand for the month of May that spilled over into June. Data for July showed a further drop in demand. Lawmakers later extended the deadline to close on a home purchase and still qualify for the tax credit to Sept. 30.
-- Written by Miriam Marcus Reimer in New York.
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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.