Existing home sales in the U.S. unexpectedly decreased in the month of July, according to a report released by the National Association of Realtors on Thursday.
NAR said existing home sales fell by 1.3 percent to an annual rate of 5.44 million in July after tumbling by 2 percent to a downwardly revised 5.51 million in June.
The continued decrease surprised economists, who had expected existing home sales to climb to an annual rate of 5.57 million in July from the 5.52 million originally reported for the previous month.
With the unexpected decrease, existing home sales dropped to their lowest annual rate since hitting 5.34 million last August.
"Contract activity has mostly trended downward since February and ultimately put a large dent on closings last month," said NAR chief economist Lawrence Yun.
Despite declining for two straight months, existing home sales in July were still up by 2.1 compared to the same month a year ago.
NAR said the unexpected decrease in existing home sales in July came as large declines in the Northeast and Midwest outweighed increases in the South and West.
Existing home sales plunged by 14.5 percent in the Northeast and dropped by 5.3 percent in the West, while existing home sales in the South and West climbed by 2.2 percent and 5.0 percent, respectively.
The report also said the median existing home price for all housing types in July was $258,300, down 1.9 percent from $263,300 in June but up 6.2 percent from $243,200 a year ago.
Total housing inventory declined 1.0 percent to 1.92 million existing homes available for sale at the end of July and is now 9.0 percent lower than a year ago, NAR said.
The unsold inventory in July represents 4.2 months of supply at the current sales pace, unchanged from June but down from 4.8 months a year ago.
"Home prices are still rising above incomes and way too fast in many markets," said Yun. "Realtors continue to say prospective buyers are frustrated by how quickly prices are rising for the minimal selection of homes that fit buyers' budget and wish list."
NAR said single-family home sales fell by 0.8 percent to a rate of 4.84 million in July, while existing condominium and co-op sales slumped by 4.8 percent to a rate of 600,000.
A separate report released by the Commerce Department on Wednesday unexpectedly showed a substantial decrease in new home sales in July.
The report said new home sales plunged by 9.4 percent to an annual rate of 571,000 in July from the revised June rate of 630,000.
Economists had expected new home sales to inch up to a rate of 612,000 from the 610,000 originally reported for the previous month.
by RTT Staff Writer
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