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Existing Home Sales Slip in July, But Pace Was Third Highest Ever

The sales of existing single-family homes slipped 2.9% in July to a seasonally adjusted annual rate of 6.72 million, the National Association of Realtors® (NAR) reported last week.

Despite the decline, existing home sales were at their third best level ever last month and 8.6% ahead of their performance a year earlier.

“Prior to this year, the July sales pace would have been a real eye-popper,” said David Lereah, the association’s chief economist. “The fact is — it remains so. The present level of home sales activity is considerably above last year’s record, and the new benchmark we’ll see in 2004 is a significant contributor to overall U.S. economic growth.”

Modest declines in mortgage interest rates in July and August “will preserve favorable housing affordability conditions and help to keep home sales historically strong in the months ahead,” Lereah said.

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Voicing optimism for continued strength in the housing market, NAR President Walt McDonald added that favorable financing is only part of the picture. “The fundamental demand from entry level buyers, dominated by the second largest generation in U.S. history — the children of the baby boom — will drive home sales over the next 10 years because this generation is entering the prime years in which people typically but their first home.”

Inventory levels of existing homes on the market in July remained unchanged from the prior month. The 2.4 million homes listed for sale represented a 4.3-month supply.

Sales were up 0.4% in the South and down 1.4% in the Northeast, 4.8% in the Midwest and 6.6% in the West.

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