US home sales drop to 14-year low

Washington, July 21

US home sales dropped to a 14-year-low in June as the shortage of supply choked the housing market, the National Association of Realtors (NAR) said in a report.

Existing home sales fell 3.3 per cent in June from May, running at a seasonally adjusted annual rate of 4.16 million units, Xinhua news agency quoted the report as saying.

It was an 18.9 per cent decline from a year ago, marking the slowest sales pace for June since 2009.

The drop in home sales was largely due to the dearth of inventory.

Some 1.08 million homes remained on the market by the end of June, down 13.6 pe rcent from a year earlier, the NAR said.

According to the NAR's estimate, at the current rate of sales, the US has 3.1 months of housing inventory left on the market.

Meanwhile, low inventory has pushed up home prices to remain at a high level, as the demand outpaces the supply.

The US median price of an existing home sold in June was $410,200, the second-highest price recorded by the NAR.

It was just 1 per cent lower than the all-time-high of $413,800 in June last year.

The US housing market has yet recovered from a plunge over a year ago, when the average rate on a 30-year mortgage started to climb from the lowest levels as the Federal Reserve began its rate hikes.