Home sales continued their downward slide in June, according to a recent report from the National Association of Realtors. The real estate trade group's latest report indicated a 2.6 percent drop in home sales last month. The continued decline has also depressed home prices, bringing the median price last month down by 6.1 percent to $215,100 from $229,000 a year ago.

The median new-home price is expected to decline 3.2 percent to $239,300 this year and then rise 5.3 percent in 2009 to $251,900, according to NAR.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, CA, said in a statement there is something of a quandary in the current market.

"A recent online survey of Realtors shows nearly a quarter of potential home buyers are waiting on the sidelines," Gaylord said. "However, timing the market can be very tricky, which is why home buyers should always have a long-term view to build wealth."

Unsold inventories up
The drop in sales pushed the inventory of unsold single-family homes and condominiums to 4.49 million units, up by 0.2 percent. That represented an 11.1 month supply at the June sales pace, the second highest level in the past 24 years.

Lawrence Yun, NAR chief economist, said in a statement that first-time home buyers are critical to the health of the housing 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. Combined with permanent increases to mortgage loan limits and enhancing the FHA loan program, the housing stimulus package working its way through Congress would go a long way toward helping consumers and boosting the overall economy."

On Wednesday, the House passed a controversial housing rescue bill that would bring relief to cash-strapped home buyers and borrowers facing foreclosures, in addition to bailing out Fannie Mae and Freddie Mac from their deepening financial troubles. The bill is to move to the Senate next and is expected to be signed into law by President Bush by the end of the week. For the last several months, Bush who voiced strong opposition to the bill, had threatened to veto the bill, but had a change of heart by Wednesday.

Regional housing conditions
Regionally, the West was the only area to show an increase in existing-home sales. NAR reports a 1.0 percent increase in home sales last month to a pace of 1.03 million. Despite the gains, the existing-home sales are 6.4 percent lower than a year ago. The median home price in the West was $288,400, which is 17.2 percent below June 2007.

In the South, existing-home sales fell 3.1 percent to an annual rate of 1.85 million in June and are 18.1 percent below June 2007. The median price in the South was $185,300, down 2.4 percent from a year ago.

Existing-home sales in the Midwest declined 3.4 percent to an annual pace of 1.12 million in June and are 17.6 percent below a year ago. The median price in the Midwest was $175,300, up 2.8 percent from June 2007.

In the Northeast, existing-home sales fell 6.6 percent to an annual rate of 850,000 in June and are 15.8 percent below June 2007. The median price in the Northeast was $256,700, down 12.6 percent from June 2007.

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