Real Estate Home sales fell 0.8 percent in June Number of first-time buyers also dropped

By Derek Kravitz

AP Real Estate Writer

WASHINGTON (AP) -- Fewer people bought previously occupied homes in June, putting this year on pace to be the worst for sales since the housing bust.

Home sales fell 0.8 percent last month to a seasonally adjusted annual rate of 4.77 million homes, the National Association of Realtors said Wednesday. That's far below the 6 million homes per year that economists say represents a healthy housing market.

Through the first six months of this year, the sales pace is behind last year's 4.91 million homes sold -- the weakest sales in 13 years. Sales have fallen in four of the past five years.

The Realtors' group said a record number of people who signed contracts canceled deals last month. And first-time buyers fell to a smaller share of the market.

Declining home prices have kept many people from selling their houses and taking new jobs in growing areas. They have also made people feel less wealthy and that has reduced the consumer spending that drives about 70 percent of economic activity.

Roughly 16 percent of home deals were canceled last month, the highest level since such records began being kept more than a year ago. It was unclear what the chief reason was for the high rate. But some buyers have canceled purchases after appraisals showed that the homes were worth less than the buyers' initial bids. A sale isn't final until a mortgage is closed.

First-time homebuyers made up just 31 percent of sales. They normally make up about half of all home sales. First-time buyers are critical to a stable housing market.

Most economists say home prices will keep falling, by at least 5 percent, through the rest of the year. Many forecasts don't anticipate a rebound in prices until at least 2013.

Published: Thu, Jul 21, 2011