There was more bad news out of the housing market Wednesday as the National Association of Realtors announced that sales of preowned homes dropped more than expected during June.
The group's monthly report on sales shows that buyers closed on new homes at the lowest rate in almost five years -- a seasonally adjusted annual rate of 5.75 million units.
That's 3.8 percent lower than the downwardly revised May rate and 10.7 percent lower than a year ago. Economists were betting the report would be closer to 5.9 million units.
There was a shred of good news in the report: The median price of a home sold in June was $230,100 -- up three-tenths of a percent from the level from a year ago. This is the first time in 11 months that median prices have shown an increase from the prior year.
But many economists are saying this anomalous increase in prices is probably an error in the data and suggest there will be a revision to the negative in the coming months.
The nation's supply of used homes for sale was essentially unchanged last month, with realtors having an 8.8 month supply available. That's well above the six-month supply many analysts suggest is necessary to support increasing prices.
This monthly report measures the number of preowned homes which actually sold (closing completed) in any given calendar month. Existing homes represent the biggest part of the residential real estate market -- about 90 percent of all home sales.
So what does all this mean?
If you're looking for a rebound in the housing market, it seems to be illusive at this point. These numbers reinforce the continuing pain that real estate is suffering -- buyers are wary to jump into the market, worried that their big investment in a home might actually lose value in the early days of their ownership and they're facing a credit market that's getting a bit more strenuous.
"Although general buying conditions remain favorable to long-term home buyers, it appears some buyers are looking for more signs of stability before they have the confidence to make an offer," said Lawrence Yun, senior economist for the realtors' group, in a prepared statement.
Until those buyers overcome that hesitance, we're not going to see a decisive rebound in real estate according to the experts.
The United States has to burn off all the excess inventory of homes before prices show a marked return to their historic single-digit annual appreciation rates. That means people have to pull the "For Sale" signs off their front lawns or we need to start seeing significant prices drops to help burn off the extra houses.
There are a lot of people who are quite negative on the overall economy because of the numbers.
"Second quarter sales fell at a 28 percent annualized rate, the fastest decline so far in this crunch, and giving the lie to Mr. Bernanke's bland assertions last week that demand will stabilize and the drag on growth from housing will diminish," wrote economist Ian Shepherdson. "Not anytime soon, it won't."