The housing market stumbled in July as sales of existing homesfell 6.7 percent - but only 3.3 percent in the Midwest - the NationalAssociation of Realtors said Monday.
The July drop broke a five-month winning streak in home resales.They fell to a seasonally adjusted annual rate of 3.35 million unitsin July, down from their robust rate of 3.59 million in June and 3.54million in May, the real estate trade group said.
The Midwest rate dropped 3.3 percent to 890,000 units.
Some economists said the sluggish economic recovery is dullingdemand and the housing market will need stronger over-all economicgrowth before displaying new vigor.
"The rise in consumer confidence after the gulf war has playedout. Declining interest rates and pent-up demand is more or lessover. So we'll see more of this until we get more positive growth,"said Mark Zandi, analyst at the West Chester, Pa., consulting firmRegional Financial Associates.
Falling mortgage rates this month could help revive sales. Bylast week, 30-year rates were down to 9.17 percent nationwide, afour-year low. "Lower interest rates should help sales in August andSeptember," said Zandi.
Despite the July decline, nationwide sales were 0.9 percentabove the level posted one year ago, just before the recession began,and higher than the annual rate for the first four months of thisyear.
Realtors President Harley Rouda said this is a strong indicatorthat the housing industry has firmed in many areas. "The market isholding strong," he said.
Richard Peach, economist at the Mortgage Bankers Association ofAmerica, said it was unrealistic to expect resales to continue attheir May-June pace, which was similar to the peaks seen in 1986 and1987.
"Now we are back down to something that can be sustained," Peachsaid.
The realtors' report showed other signs the market is firming.The national median price of an existing home sold in July rose to$103,000, or 1 percent higher than a month earlier and 5 percentabove the year-ago median price of $98,100, NAR said.
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