U.S. Existing-Home Sales Off 0.5% in July

Nationwide sales of existing homes weakened for a second consecutive month during July, the National Assn. of Realtors said Monday, as the effect of higher mortgage rates from earlier in the year began to slow the housing market.

In California, the surge in housing sales that began several months ago slowed in July but remained well above last year’s pace.

Statewide, 500,500 single-family detached homes were sold in July on a seasonally adjusted annualized basis. That is down 0.6% from a revised rate of 503,570 homes sold in June, according to the California Assn. of Realtors. The July sales pace, however, is 17.6% above that of the same month last year.

Nationwide, sales of existing homes fell 0.5% in July to a seasonally adjusted annualized rate of 4.14 million. That follows a decline of a revised 2.8% for June, to 4.16 million.

The drop in July sales was not as sharp as Wall Street economists had anticipated, however. They had forecast that sales of existing homes would drop to a rate of 4.10 million a year last month.

Existing-home sales peaked in May at a record rate of 4.28 million a year before the upward trend started to lose momentum in June and July.

John Tuccillo, chief economist for the national Realtors group, said something of a falloff in sales was to be expected in light of the extraordinarily brisk rate of business earlier in the year.

“Any time a new record is set in the pace of sales, it’s inevitable that some slowdown will follow,” he said. He added that the July sales rate is still higher than that posted for any single month in 1995.

The Federal National Mortgage Assn., or Fannie Mae, said the average rate for a 30-year mortgage loan for July was 8.25%, down from 8.32% for June. That still represents a significant run-up in mortgage rates since January, for which the average was 7.03%.

Regionally, the only area to show an increase in sales of existing homes for July was the Midwest, where they rose 5% to a seasonally adjusted annualized rate of 1.06 million.

In the Northeast, sales were down 1.6% to 630,000 a year, and in the West they fell 2.2% to 900,000. Sales in the South, the nation’s largest regional housing market, were down 1.3% last month to 1.56 million a year.

The nationwide average price for a resale home fell sightly for July to $149,400 from $150,200 for June.

In California, the statewide median sales price for July was $182,780, virtually unchanged from $182,820 for June. The July median price represents an increase of 1.4% from the same month last year.

Despite the drop in the sales rate from June to July, real estate industry observers said the state’s real estate market was continuing to recover from a six-year slump. The state Realtors group said sales statewide for the first seven months of the year are the highest reported for the period since 1989.

“We are particularly encouraged to see that home prices are continuing to stabilize or increase in many cities and areas throughout California,” association President Rick Snyder said in a statement.