Sales of U.S. previously owned homes fell in June for a second month, adding to evidence the market will slump as the effects of a federal tax credit fade.
Purchases of existing houses dropped a less-than-forecast 5.1 percent to a 5.37 million annual rate, figures from the National Association of Realtors showed today in Washington. The number of transactions will be “very low” in coming months, reflecting the end of the government incentive, the group’s chief economist said in a news conference.
The tax credit of up to $8,000 boosted sales earlier in the year, releasing pent-up demand and indicating the market will be slow to recover. Increasing foreclosures are swelling the number of unsold homes, putting pressure on prices and keeping buyers out of the market as unemployment hovers near 10 percent and the economy cools.