Sales Fall, Prices Rise

Existing-home sales were sharply lower in July following expiration of the home buyer tax credit but home prices continued to gain, NAR says. Existing-home sales dropped 27.2 percent to a seasonally adjusted annual rate of 3.83 million units in July from a downwardly revised 5.26 million in June, and are 25.5 percent below the 5.14 million-unit level in July 2009. Sales are at the lowest level since the total existing-home sales series launched in 1999, and single family sales--accounting for the bulk of transactions--are at the lowest level since May of 1995. "Given rock-bottom interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly if the economy consistently adds jobs," says NAR Chief Economist Lawrence Yun. 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.