From the WSJ:
Existing-home sales in June fell to a seven-month low, and the number of contract cancellations soared, signaling that buyers are rethinking home purchases amid national economic uncertainty.
Sales decreased 0.8% from a month earlier to a seasonally adjusted annual rate of 4.77 million, the National Association of Realtors said Wednesday. It was the third-straight monthly drop and puts this year’s pace behind last year’s 4.91 million homes sold, which had marked the weakest sales in 13 years.
The median sales price was $184,300, up 0.8% from $182,900 a year earlier.
“The housing market has been two steps forward, then two steps back,” said Chris Mayer, an economics professor at Columbia University. “This is a sign of the lack of progress in developing a mortgage market that can take us past the housing crisis.”
Sales were down 5.2% in the Northeast and 1.7% in the West, while other regions saw modest gains; sales were up 0.5% in the South and 1% in the Midwest. A separate report released Wednesday showed one bright spot for sales was Florida. Second-quarter home sales in Miami were up 13.5% from last year, and hit a five-year high, according to brokerage Douglas Elliman.
The overall decline in home sales “suggests that the recent deterioration in economic conditions has already hit the housing market,” according to Paul Dales, senior U.S. economist at the Toronto-based Capital Economics.
Sales of previously owned U.S. homes unexpectedly declined in June to a seven-month low as the industry struggled to overcome rising unemployment and foreclosures.
Purchases dropped 0.8 percent to a 4.77 million pace, data from the National Association of Realtors showed today in Washington. The median projection in a Bloomberg News survey called for a gain to 4.9 million. Inventories increased, more contracts were canceled and 30 percent of transactions last month were of distressed dwellings, the figures showed.
Stricter lending rules, unemployment above 9 percent and delays in processing foreclosures mean it may take years to reduce the number of distressed properties on the market even as all-cash purchases have recently helped buoy demand. Federal Reserve Chairman Ben S. Bernanke last week said the decline in confidence and lack of job growth that are impeding consumer spending are also keeping real estate “depressed.”
“The market continues bumping along the bottom, with every move ahead matched by a disappointing setback,” said Richard DeKaser, an economist at Parthenon Group in Boston. “As long as the risk of further price declines is appreciable, buyers and lenders alike are going to remain skittish. For there to be a meaningful rebound in sales, we’ll probably have to wait until 2012.”