S&P Report: U.S. Existing Home Sales Dropped In July

Last month U.S. sales of existing homes dropped for the third time in four months, according to a report published yesterday by Standard & Poor's Ratings Services. The National Association of Realtors reported on August 18 on that July sales were down 3.5% to a seasonally adjusted annual rate (SAAR) of 4.67 million units. Existing home sales are currently 21% above their level a year ago, but that's due in part to the expiration of the U.S. government's homebuyer tax incentives, which depressed sales last July. Existing home sales are now 35.6% below their September 2005 peak. "We don't expect record-low mortgage rates to improve the struggling housing market," said Standard & Poor's research analyst Erkan Erturk. "Home prices and sales have been weak even though the average 30-year fixed mortgage rate has been near or below 5% since 2009, and the housing market has been a drag on the economy." July's decline in existing home sales highlights the slow recovery in sales and home prices. Meanwhile, despite the average 30-year fixed mortgage rate being 4.45% at the end of July and now 4.19% (the lowest point recorded since the 1970s), weak demand from homebuyers continues to pressure home sales and prices.