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US existing home sales dive to two-year low

WASHINGTON - Sales of US homes plunged in July to their lowest point since January 2004, according to data on Wednesday that confirmed that the long-booming property market is hitting the brakes hard.

Sales of existing homes fell 4.1 percent to a seasonally adjusted annual rate of 6.33 million units in July compared to June, the National Association of Realtors said.

The figure was down a hefty 11.2 percent from the sales pace of 7.13 million homes seen in July 2005.

David Lereah, chief economist for the industry group, said higher interest rates had dampened sales but that softening prices should now lure buyers back into the market.

“Many potential home buyers have been on the sidelines, some ’kicking the tires’, but mostly waiting for sellers to compromise on prices and terms,” he said.

“Now sellers in many areas of the country are pricing to reflect current market realities. As a result, there could be some lift to home sales, but it’ll likely take some months for price appreciation to rise,” he said.

The national median price for an existing home rose 0.9 percent year-on-year last month to 230,000 dollars, the NAR said.

The government was due to release July figures for sales of new homes on Thursday.