Existing home sales drop 5.1 percent in June

Existing home sales dropped 5.1 percent in June with the numbers dropping since the expiration of the federal government's tax credit. 

Sales dropped to a seasonally adjusted rate of 5.37 million in June from 5.66 million in May, 9.8 percent higher than June 2009, according to a report released Thursday by the National Association of Realtors.

"The market shows uncharacteristic yet understandable swings as buyers responded to the tax credits," said Lawrence Yun, chief economist for NAR.

"June home sales still reflect a tax credit impact with some sales not closed due to delays, which will show up in the next two months."

Homebuyers were given a three-month reprieve to close on contracts completed by the April 30 deadline. NAR has pushed to extend the closing deadline from June 30 to September 30 because of a backlog. 

The tax credit was worth as much as $8,000 for homebuyers.

"Broadly speaking, sales closed after the home buyer tax credit will be significantly lower compared to the credit-induced spring surge," Yun said. "Only when jobs are created at a sufficient pace will home sales return to sustainable healthy levels."

Although home sales are down, there's an expectation total sales will finish above 2009 followed by gains in 2010, said NAR President Vicki Cox Golder. 

Those seeking 30-year, fixed rate mortgages fell to a record low 4.74 percent in June from 4.89 percent in May. The rate was 5.42 percent in June 2009, according to Freddie Mac. 

The average price of a home was up 1 percent from a year ago, to $183,700 in June. 

Single-family home sales fell 5.6 percent to a seasonally adjusted annual rate of 4.70 million in June from a level of 4.98 million in May, but are 8.5 percent above the 4.33 million pace in June 2009. 

The Northeast was the only region to see an increase in sales, which were up 7.9 percent in June and 17.1 percent above June 2009. 

While home sales fell in the Midwest, South and West, all were above last year's levels. 

• Sales in the Midwest dropped 7.5 percent in June but were 11.8 percent higher than a year ago. 

• Sales in the South fell 6.5 percent but are 11.0 percent above June 2009. 

• Sales in the West dropped 9.3 percent to an annual pace of 1.17 million in June but are 0.9 percent higher than a year ago.