washington -- The sales pace of previously owned U.S. homes fell slightly in July, but the inventory of unsold properties soared to the highest level in more than 15 years as troubles in the sub-prime mortgage market continued to wreak havoc on the housing sector.
Home sales slid 0.2% in July to a seasonally adjusted annual rate of 5.75 million units, the National Assn. of Realtors said Monday.
That brought the supply of unsold homes at the current sales pace to 9.6 months' worth, the highest level on record since 1999, when the association began tracking all types of properties, such as condominiums, together with single-family homes.
The supply of single-family homes, the bulk of the inventory included in the association's data, rose to 9.2 months' worth, which was the biggest supply on hand for sale since October 1991.
"This shows that the housing downturn continues to intensify," said Mark Zandi, chief economist at Moody's Economy.com in West Chester, Pa. "It shows no sign of abating. Given the turmoil in the financial market from lending problems, the housing problem will continue in the months ahead."
Even with a somewhat dismal picture continuing on the housing front, National Assn. of Realtors economist Lawrence Yun maintained that this key segment of the U.S. economy was still holding on.
"In the aggregate, we don't see the sub-prime market damaging the economy," Yun said.
Bob Moulton, president of Americana Mortgage Group Inc., a mortgage brokerage firm in Manhasset, N.Y., said there was still a steady stream of mortgage business.
"We are still writing our fair share of business," Moulton said. "We are still seeing transactions. We still see homeowners buying houses." He noted that declining home prices would ultimately boost home sales.
According to the latest home sales data from the Realtors association, median home prices fell 0.6% from July 2006 to $228,900.
"Volatility creates transactions, and with median home prices falling, it's great for first-time home buyers," Moulton said.
Last month's decline in existing-home sales was smaller than expected. Economists polled ahead of the report had expected home resales to drop to a 5.7-million-unit pace.