Sales of existing homes in the U.S. fell more than forecast last month, a sign that residential real estate remains mired in its worst recession in 16 years. Sales last month were down 11.4 percent from a year earlier, the National Association of Realtors said Wednesday in Washington.
Nashville-area sales fell at a greater percentage than the national rate, although with one key caveat.
There were 3,588 home closings reported for the month of June, according to figures provided by the Greater Nashville Association of Realtors. This represents a decrease of 11.6 percent from the 4,060 closings reported for the same period last year.
The good news for Nashville? June 2006 sales were a record for the area, said Richard Courtney, president of the Greater Nashville Association of Realtors, in the GNAR’s monthly sales release. “As far as June is concerned, there were nearly 3,600 closings, which is great,” he said in the release.
“It just so happens that June of 2006 was the best month ever in the history of home sales in this area, and the only time there were more than 4,000 closings in one month,” said Courtney. “That tends to distort the fact that we really have had a strong month.”
Nationwide, the housing slump, which slowed economic growth in the first quarter to the lowest level since 2002, is the biggest risk to the six-year economic expansion, according to Federal Reserve policy makers.
Purchases declined 3.8 percent to an annual rate of 5.75 million, the slowest pace since November 2002, from a revised 5.98 million in May.
There were some good signs, however. At the same time, the supply of homes for sale dropped for the first time this year and the median price rose for the first time in 11 months.
And Nashville’s figures were, on paper, less encouraging. The available homes for sale locally, at the end of June, was 21,236. That compares with an inventory of 15,789 at the end of June 2006.
Courtney said that with the existing sales rate, however, the figures meant a little less than a six-month sale average per house, which shows “an appropriately balanced market.”
The higher inventory figures also show growth in Nashville’s overall economy, Courtney said.
Homes for sale
Nationally, the backlog of homes for sale fell 4.2 percent. At the current sales pace, that represented 8.8 months’ worth, matching the prior month as the highest since 1992.
The median price rose 0.3 percent last month from a year ago to $230,100, the first increase from year-earlier levels in 11 months, the Realtors group said.
The market “is bumping along the bottom," said John Silvia, chief economist at Wachovia Corp. in Charlotte, N.C.
Tuesday, Countrywide Financial Corp., the biggest U.S. mortgage lender, cut its profit forecast as a growing number of homeowners fell behind on home-equity loan payments.
Chief Executive Officer Angelo Mozilo told investors on a conference call that he expects ``difficult housing and mortgage market conditions to persist’‘ through the end of the year.
Resales of single-family homes fell 3.5 percent to an annual rate of 5.01 million.
Purchases fell 7.3 percent in the Northeast, 6.8 in the West, 2.8 in the Midwest and 1.7 in the South.
The government is scheduled to report today on new-home sales. The Commerce Department report may show a 2.7 percent decline for June, according to the median forecast in a Bloomberg survey.