June Existing Home Sales Drop 5.1%

By Tom Granahan
FOXBusiness

The economy got a rare dose of good news Thursday morning in the form of home sales that came in better than what economists were expecting.

The National Association of Realtors said existing home sales -- completed deals on single-family, townhomes, condos and co-ops -- came in at a seasonally adjusted annual rate of 5.37 million June, versus the 5.2 million that was estimated. While the latest number represents a decline of 5.1% from May, and is a three-month low, it is 9.8% higher than the year-ago level of 4.89 million sales.

“June home sales still reflect a tax credit impact with some sales not closed due to delays, which will show up in the next two months,” said Lawrence Yun, the NAR’s chief economist, referring to the government’s homebuyer tax credit that expired at the end of April . “Broadly speaking, sales closed after the home buyer tax credit will be significantly lower compared to the credit-induced spring surge. Only when jobs are created at a sufficient pace will home sales return to sustainable healthy levels.”

Analysts agree that a sustainable pick up in the housing market is largely dependent on the jobs market getting much healthier. Despite record-low rates on home mortgages, would-be buyers are either unable to afford a home because they can’t find work, or are reluctant to buy because of their uncertain job status.

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