Existing Home Sales Fall in July

Sales of existing single-family homes fell 4.0 percent in July to a seasonally adjusted annual rate of 4.12 million in July from 4.29 million in June, according to the National Association of Realtors. The current figure represents an eight-month low. Still, the current rate is 21.5 percent above the 3.39 million level in July 2010.

Overall, existing home sales-including single-family, multifamily and condo units-fell 3.5 percent to a seasonally adjusted annual rate of 4.67 million in July from 4.84 million in June, which is the third decline in four months and a 2011 low. Overall sales are 21.0 percent above the 3.86 million unit pace in July 2010, immediately following the expiration of the home buyer tax credit.

The median existing single-family home price was $174,800 in July, down 4.5 percent from a year ago.

"Affordability conditions this year have been the most favorable on record dating back to 1970, but many buyers are being held back because banks are offering financing to only the most highly qualified borrowers, ignoring a large share of otherwise creditworthy buyers," said NAR Chief Economist Lawrence Yun. "Those potential buyers represent the difference between an uneven recovery and a much more robust housing market that could stimulate additional economic activity and create jobs."

NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said a high number of potential home buyers are unable to complete transactions. "For both mortgage credit and home appraisals, there's been a parallel pendulum swing from very loose standards which led to the housing boom, to unnecessarily restrictive practices as an overreaction to the housing correction," he said.