U.S. existing home sales fell in July

Aug 27, 2007 - The pace of sales of pre-owned U.S homes fell slightly in July to a 5.75 million unit annual rate and the supply of unsold single-family homes hit its highest level since 1991, the National Association of Realtors said in a report on Monday.

Total existing home sales, which include condominiums, fell 0.2 percent in July from an upwardly revised 5.76 million seasonally adjusted annual rate in June, first reported as 5.75 million.

The association's economist Lawrence Yun said the market is holding on despite temporary mortgage disruptions from fallout in the subprime market and rising foreclosures.

"In the aggregate, we don't see the subprime market damaging the economy," Yun said.

But the inventory of homes for sale rose 5.1 percent to 4.59 million, representing 9.6 months worth of supply at the current sales pace. That total, which includes condominiums, is the highest on record since the association began tracking both single-family and condominium sales together in 1999.

The supply of single-family home sales, which accounts for the bulk of existing home sales, was at 9.2 months' worth in July, the highest level since 9.3 months in October of 1991.

"This shows that the housing downturn continues to intensify. It shows no signs of abating," said Mark Zandi, chief economist at Moody's Economy.com in West Chester, Pennsylvania.

"Given the turmoil in the financial market from lending problems, the housing problem will continue in the months ahead," he added.

Last month's decline in existing home sales was smaller than expected. Economists polled ahead of the report forecast home resales to drop to a 5.70 million-unit pace.

Median home prices fell 0.6 percent from a year ago to $228,900.