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WASHINGTON : US home sales fell another 2.6 percent in June as inventories rose and prices fell with buyers still hesitant in the face of a horrific market slump, industry data showed on Thursday.
The National Association of Realtors reported sales of existing homes and apartments fell 2.6 percent to a seasonally adjusted annual rate of 4.86 million. The level is 15.5 percent lower than in June 2007.
The report was also weaker than the average Wall Street estimate of a pace of 4.95 million, and a sign that the real estate market is still struggling to find a bottom.
NAR president Richard Gaylord said the association's recent surveys showed "nearly a quarter of potential home buyers are waiting on the sidelines," in the face of declining prices.
"However, timing the market can be very tricky, which is why home buyers should always have a long-term view to build wealth."
The inventory of unsold homes at the end of June rose 0.2 percent to 4.49 million units, an 11.1-month supply at the current sales pace, up from a 10.8-month supply in May.
The median existing-home price for all housing types was 215,100 dollars in June, down 6.1 percent from a year ago.
The US real estate market is in its worst slump in decades after years of sizzling growth fuelled by low interest rates and speculation, including a boom in lending to sub-prime borrowers with poor credit histories.
The slump has pushed the US economy to the brink of recession and triggered massive losses among banks and finance firms, which have been forced to tighten lending.
Lawrence Yun, NAR's chief economist, said foreclosures and short sales - in which sellers have to pay cash at the settlement because of the price decline - account for around one-third of transactions, which make it harder to get a clear picture of the market.
But Yun said a credit for first-time home buyers, part of a massive housing relief bill that appears headed for final congressional approval, could help unfreeze the real estate market.
"About four in 10 homes are purchased by first-time buyers, which frees existing owners to trade up," Yun said. "With many potential first-time home buyers on the sidelines, a first-time buyer tax credit would have a significant positive impact on both housing and the economy."
Rising interest rates may present another obstacle for some buyers, according to the group. It cited the latest figures from finance group Freddie Mac that that the average 30-year, conventional, fixed-rate mortgage rose to 6.32 percent in June from 6.04 percent in May. - AFP/de
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