Free Falling

Sales of previously owned homes, which make up most of the housing market, tumbled 2.6 percent in June, nearly double the decline that economists had expected, according to a report released Thursday by the National Association of Realtors, reinforced fears that the weak job market and scarcity of credit are discouraging Americans from purchasing homes. Those who may be in the market for a house may find it more difficult to take out a mortgage.

Sales slowed to an annual rate of 4.86 million, adjusted for seasonal variables. That follows a 2 percent increase in May. Sales declined 3.4 percent in the Midwest. Total sales are 15.5 percent below their level in June 2007.

At the current sales rate, it would take more than 11 months to sell off the current inventory of unsold homes, and some economists thought that estimate may be understated. Values are dropping as well, which is cutting into many homeowners’ equity lines.

Many Americans expect home prices to fall further in the next year, the Realtors group said, which means many would-be buyers are holding out. Source New York Times