WASHINGTON — Existing home sales fell a record 27.2% in July to an annual rate of 3.83 million units as purchase activity continued to tumble following the expiration of federal subsidies, the National Association of Realtors said Tuesday.
The seasonally adjusted sales pace is the slowest since 1995 and leaves the nation with a record 12.5 months of inventory.
The July sales drop represents the third consecutive monthly decline since federal credits for new purchases expired April 30, though some signed deals were allowed to percolate through the system and did not close until the end of September. Economists expected 4.70 million existing home sales in July.
“It is hard to justify the magnitude of the decline on tax credits alone,” Diane Swonk, chief economist at Mesirow Financial, said in a research note. “The recent loss in jobs and concerns about the sustainability of the recovery are more likely the culprits.”
The last time inventories approached July’s levels was in 1982, when the inventory of single-family homes on the market reached 13.8 months. The index does not reflect homes that have been pulled from the market by frustrated sellers.
June sales were downwardly revised to 5.26 million units from an originally reported 5.37 million sales pace.