Golden Sun eXtra Your Local News Source, Mohave County, AZ

Sales of previously occupied homes plunged last month to the lowest level in 15 years, despite the lowest mortgage rates in decades and bargain prices in many areas.

July sales fell by more than 27% to a seasonally adjusted annual rate of 3.83 million, the National Association of Realtors said Tuesday. It was the largest monthly drop on records dating back to 1968, and sharp declines were recorded in all regions of the country.

Sales were particularly weak among homes in the lower to mid-priced ranges. For example in the Midwest, homes priced between $100,000 and $250,000 tumbled nearly 47%.

The weakness follows a strong spring, when now-expired government tax credits sparked sales, especially among first-time buyers of lower-priced homes. With the increasingly inevitable double-dip in prices yet to come, things could yet get a lot worse.

The tax credits caused many of those buyers to speed up their home purchases. Sales have weakened since the credits expired on April 30.

One reason the market is hurting is that buyers and sellers are in a standoff over prices. Many sellers are reluctant to lower their prices. And buyers are hesitating because they think home prices haven't bottomed out.

The housing market is also being hampered by the weakening economic recovery. Unemployment remains stuck at 9.5% and many potential buyers worry they might not have a job to pay the mortgage.

Foreclosures are running about 10 times higher than before the housing bust. Though the average rate for a 30-year fixed mortgage has sunk to 4.42%, many people can't qualify because banks have tightened their lending standards.

The drop in July's sales was led by 35% plunge in the Midwest. Sales were down 30% in the Northeast, 25% in the West and 23% in the South. The median sale price was $182,600, up 0.7% from a year ago, but down 0.2% from June.

UPDATE 8.25: NEW home sales dropped 12.4% to a seasonally adjusted annual rate of 276,000 last month, down from a downwardly revised 315,000 in June, the Commerce Department reported Wednesday. Sales year-over-year fell 32.4%, the biggest drop in history.

On Tuesday, a real estate industry report showed that existing home sales sank 27.2% in July, twice as much as analysts expected, to a seasonally adjusted annual rate of 3.83 million units. The pace of sales of single family homes, which account for a bulk of the transactions, fell to the lowest level since May 1995.

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