Sales of existing homes continued to slow in June, sliding 2.6 percent to an annualized pace of 4.86 million homes, according to figures released today by the National Association of Realtors (NAR). That represents a 15.5 percent decline compared to the same period last year.
Median sales prices for existing homes also took a hit, falling 6.1 percent from a year ago to $215,100 in June. The turmoil in the market is certainly a factor, although Lawrence Yun, NAR's chief economist, seemed to suggest that sales of distressed properties were creating a "downward distortion" in the home price information that wasn't useful. "With short sales and foreclosures accounting for approximately one-third of transactions, it's hard to make an apples-to-apples comparison with a year ago when they were only a minor portion of the market," he said.
However, foreclosures have become a major force in the housing market in 2008, with more than 250,000 foreclosure filings reported in June alone, according to RealtyTrac.
With so many properties and households in financial distress, the inventory of homes for sale is growing larger and larger. With 4.49 million existing homes on the market, there was 11.1 months' worth of supply in June, NAR said.
Mortgage rates aren't helping the situation. The national average rate for a 30-year fixed-rate mortgage soared to 6.45 percent—the highest it's been in 2008—in Freddie Mac's weekly survey released June 26, 2008.
Alison Rice is senior editor, online, at BUILDER magazine.