EmailExisting home sales fell from an upwardly revised 4.84 mln (from 4.77 mln) in June to 4.67 mln in July. The Briefing.com consensus expected sales to increase to 4.87 mln.
For the second consecutive month, the National Association of Realtors (NAR) blamed contract cancelations as the main source for the weak sales levels. Even though the pending home sales index increased for the second consecutive month, 16% of realtors reported at least one sales contract was canceled in July. This was the same rate as June and up from 4% in May.
Many of the cancelations have been due to low appraisals. Banks are trying to force buyers and sellers to renegotiate the selling price below the initially agreed upon price.
The lack of sales pushed monthly inventory levels to 9.4 months, its highest point since November 2010.
While still high, distressed sales accounted for only 29% of all sales in July, down from 30% in June and 32% in July 2010. Prices fell 4.4% y/y.
NAR is spinning the news by showcasing a 21.0% y/y increase in July. However, that rate is only strong because it compares to the end of the homebuyers' tax credit when demand tumbled.
