US existing-home sales fall for third month

Sales of previously owned US homes dropped in June for the third straight month amid an unexpected spike in contract cancellations, an industry group said Wednesday. Existing-home sales slipped 0.8 percent from May to a seasonally adjusted annual rate of 4.77 million, the National Association of Realtors (NAR) said. Most analysts had estimated sales would rise to a 4.93 million rate. "A variety of issues are weighing on the market including an unusual spike in contract cancellations in the past month," NAR chief economist Lawrence Yun said in a statement. Sixteen percent of NAR members reported a sales contract was cancelled in June, up from four percent in May. "The underlying reason for elevated cancellations is unclear," Yun said, while suggesting possible problems like tight credit for buyers and low appraisals for the homes. Despite mortgage rates near historic lows and rock-bottom home prices, the US housing market has remained depressed amid high unemployment -- 9.2 percent in June -- and stalling economic growth. Sales of single-family homes, the largest sector, were unchanged, while sales of condominiums and co-ops fell 7.0 percent. Home sales were 8.8 percent below the June 2010 level, when the US government's homebuyer tax credit program ended. "Economic uncertainty and the federal budget debacle may be causing hesitation among some consumers or lenders," Yun said, referring to a stalemate in Congress over a deficit-reduction plan linked to raising the US debt ceiling.