Economy

Existing-Home Sales Fell 5.1% In June

June 2010 home sales

A house for sale in Miami Lakes, Fla. in July 2010. Alan Diaz/AP hide caption

itoggle caption Alan Diaz/AP

June was another sad month for many real-estate agents and the larger economy, with home sales falling 5.1 percent in the month compared with May.

The decline was thought to result from the end of the federal home-buyer tax credit in May, according to Lawrence Yun, chief economist for the National Association of Realtors. And it demonstrated the inability of historically low interest rates to pump up sales.

Because real estate people tend to be the kind who see silver linings in clouds, the NAR noted that even though sales fell in June, they were still 9.8 percent higher than the really lousy June of 2009.

Still, that didn't mean that they were ignoring the fairly harsh reality facing their industry and the larger economy.

To that point, an excerpt from the NAR's news release:

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

The economy is stuck in something of a vicious cycle. Strong job growth is essential to reviving the housing market.

But much of the job growth in the recent past has come from the housing market. A CNBC story from November 2009 quoted Michael Pento, chief economist at Delta Global Advisers.

"In the earlier part of this decade, 40 percent of all new jobs created were in real estate. Attorneys, mortgage brokers, agents, construction—they were all circled around housing," Pento says. "We've had a jobless recovery in the last two recessions. This is going to be the third jobless recovery in a row."

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