Home Sales Drop 27 Percent in July, Slowing Recovery
Tom Diemer
Correspondent
Posted:
08/24/10
Another setback for the "Recovery Summer." Sales of previously owned houses dropped by 27.2 percent in July compared to June, taking the market for single-family homes to its lowest level in 15 years.
Sales of single-family abodes -- the bulk of the market -- were at their lowest level since 1995, according to the National Association of Realtors, which conducts the monthly survey. Allowing for seasonal adjustments, sales of townhomes, condominiums, co-ops and single-family units amounted to 3.83 million last month, the worst showing since 1999.
"We obviously saw the numbers," White House Deputy Press Secretary Bill Burton said, "and it shows there's a lot more work yet to do." Burton didn't go into detail. "I'm not an economist," he said. "I can't really speak to when a recession starts or ends."
Realtors chief economist Lawrence Yun said soft sales were likely to continue for a couple of months. He said the expiration of the home-buyer tax credit at the end of April hurt the market. "Since May, after the deadline, contract signings have been notably lower and a pause for home sales is likely to last through September," Yun said. "However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs."
Even so, Yun said, the surge in sales during the first half the year should push sales to the 5 million market for 2010 -- pretty decent considering that annual sales have averaged 4.9 million over the last 20 years.
In a program called "Recovery Summer," the White House has been highlighting success stories that have been aided by the Obama administration's economic policies. Vice President Joe Biden, a big part of the effort, insisted Tuesday, "We're turning this around." He did not address the housing figures, but said generally of the recovery, "It's not happening as fast as any of use would like, and certainly not fast enough for the millions of folks who are still out of work, but there isn't any doubt, we're moving in the right direction."
Sales of single-family abodes -- the bulk of the market -- were at their lowest level since 1995, according to the National Association of Realtors, which conducts the monthly survey. Allowing for seasonal adjustments, sales of townhomes, condominiums, co-ops and single-family units amounted to 3.83 million last month, the worst showing since 1999.
"We obviously saw the numbers," White House Deputy Press Secretary Bill Burton said, "and it shows there's a lot more work yet to do." Burton didn't go into detail. "I'm not an economist," he said. "I can't really speak to when a recession starts or ends."
Realtors chief economist Lawrence Yun said soft sales were likely to continue for a couple of months. He said the expiration of the home-buyer tax credit at the end of April hurt the market. "Since May, after the deadline, contract signings have been notably lower and a pause for home sales is likely to last through September," Yun said. "However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs."
Even so, Yun said, the surge in sales during the first half the year should push sales to the 5 million market for 2010 -- pretty decent considering that annual sales have averaged 4.9 million over the last 20 years.
In a program called "Recovery Summer," the White House has been highlighting success stories that have been aided by the Obama administration's economic policies. Vice President Joe Biden, a big part of the effort, insisted Tuesday, "We're turning this around." He did not address the housing figures, but said generally of the recovery, "It's not happening as fast as any of use would like, and certainly not fast enough for the millions of folks who are still out of work, but there isn't any doubt, we're moving in the right direction."