Existing home sales inched lower in June as cancellations spiked
Existing home sales slid 0.8% in June, as contract cancellations spiked unexpectedly and prices rose slightly, according to a leading trade group. The National Association of Realtors said seasonally adjusted sales decreased to an annual rate of 4.77 million last month from 4.81 million for May. Existing sales in June were 8.8% lower than 5.23 million a year earlier, which was when the homebuyer tax credit expired. Analysts polled by Econoday projected June existing home sales of 4.9 million with a range of estimates between 4.8 million and 5.2 million. "Home sales had been trending up without a tax stimulus, but a variety of issues are weighing on the market including an unusual spike in contract cancellations in the past month," NAR Chief Economist Lawrence Yun said. "The underlying reason for elevated cancellations is unclear, but with problems including tight credit and low appraisals." Yun said 16% of members reported a sales contract was canceled in June, up from 4% in May, "which stands out in contrast with the pattern over the past year." He said fluctuations for pending home sales in April and May possibly led to higher closed sales in June. NAR classifies existing home sales as completed transactions of single-family, town homes, condominiums and co-ops. "However, economic uncertainty and the federal budget debacle may be causing hesitation among some consumers or lenders," according to Yun. NAR said the median existing home price rose 0.8% from a year ago to $184,300, according to NAR. Distressed sales of single-family homes, town homes, condominiums and co-ops accounted for 30% of all sales in June, down from 31% in May and 32% a year ago. The inventory of existing homes for sale at the end of June rose 3.3% to 3.77 million, representing a 9.5-month supply. That is up from 9.1 months worth of supply at May 31. Write to Jason Philyaw.