Sales of existing American homes fell by twice as much as forecast in July, prompting a large fall in the S&P 500 index during early trading.
According to the National Association of Realtors (NAR), purchases of existing homes fell 27.2% in July compared with the level in June, which is the lowest level in a decade.
The NAR says while home prices continued to gain, the expiration of the home buyer tax credit meant purchases fell to an annual rate of 3.89m units in July.
Meanwhile, demand for single family houses hit a 15-year low, coming in at their lowest level since May 1995.
According to Bloomberg, the S&P 500 Index fell 1.4% at 10.29am (Eastern Daylight Time), while the Stoxx Europe 600 Index declined 2.1% on the back of the weaker than expected data. (article continues below)
Lawrence Yun, the chief economist at NAR, says in a statement that the soft pace of sales will continue for an additional few months.
“Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired,” he says.
“Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September.”