WASHINGTON – Sales of existing homes fell for a fourth straight month in June as all sections of the country showed weakness.
The National Association of Realtors reported that sales of existing homes dropped by 3.8 percent in June to a seasonally adjusted annual rate of 5.75 million units, the slowest sales pace in 4 1/2 years.
The median price of a new home edged up slightly to $230,300 in June, a small 0.1 percent increase from the sales price a year ago. That was the first year-over-year price increase in 11 months but analysts cautioned that it would take more months to determine whether the downward trend in prices has finally stabilized.
The decline in home sales was larger than had been expected and served to underscore the problems in housing, which is currently in the worst slump in 16 years.
The housing downturn is occurring after five boom years in which sales of both new and existing homes set records with home prices soaring by double-digit rates. However, starting in 2006, sales have slumped as mortgage rates rose and prospective buyers balked at the price levels they were seeing in many parts of the country.
Those problems have been exacerbated in recent months by spreading problems in the subprime mortgage market, which offered loans to buyers with spotty credit histories. Rising defaults in those areas are dumping more homes onto an already glutted market.
The sales declines covered all parts of the country. Sales were down 7.3 percent in the Northeast and 6.8 percent in the West. Sales fell 2.8 percent in the Midwest and 1.7 percent in the South.