Reply #86: Home sales dropped 3.5 pct. in July, hit 2011 low

[Demeter]

AND THOSE ARE ALL SHORT SALES...

http://www.google.com/hostednews/ap/article/ALeqM5j5YfyhaBqdegA46f0AcxUMjTs-gw?docId=41a74d4692a74e3aa3419da9e0a27f35

The number of people who bought previously occupied homes fell in July for the third time in four months. This year is on pace to be the worst in 14 years for home sales, as more Americans worry that the economy could slip back into another recession...Home sales fell 3.5 percent last month to a seasonally adjusted annual rate of 4.67 million homes, the National Association of Realtors said Thursday. That's far below the 6 million that economists say must be sold to sustain a healthy housing market.... Sales are lagging behind last year's 4.91 million sold — the weakest in 13 years...

First-time homebuyers made up just 32 percent of sales. First-time buyers are critical to strong housing markets and normally make up about half of all sales. Their purchases of low and moderately priced homes also allow sellers to move up to pricier homes. The weak data show "the housing market will not save the U.S. economy," said Paul Dales, senior U.S. economist at Capital Economics.

Since the housing boom went bust in 2006, sales have fallen in four of the past five years. Declining home prices and super-low mortgage rates haven't been enough to boost sales this year...Some sales are falling apart at the last minute. At least 16 percent of deals were canceled ahead of closings last month. That's four times the number in May and the highest level since such records began being kept more than a year ago. A sale isn't final until a mortgage is closed. Buyers have canceled purchases after appraisals showed that the homes were worth less than the buyers' initial bids....

Foreclosures and short sales — when a lender agrees to sell for less than what is owed on a mortgage — made up about 29 percent of all home sales last month. That's up from about 10 percent in past years. And a wave of foreclosures are being held up, either by backlogged courts or lenders awaiting state and federal probes into troubled foreclosure practices. Investors have targeted foreclosures and other deeply discounted properties. Their purchases accounted for 18 percent of sales in July....Most economists say home prices will keep falling, by at least 5 percent, through the rest of the year. Many forecasts don't anticipate a rebound in prices until at least 2013...The glut of unsold homes declined slightly in July to 3.65 million homes. At last month's sales pace, it would take 9.4 months to clear those homes. Analysts say a healthy supply can be cleared in six months...MORE