Home Resales Fell 2.6%
In July; Stockpile Grew

Sales of existing homes retreated in July from June's record highs and the stockpile of unsold homes rose, a hint that the still-strong residential real-estate market may be starting to lose some of its vigor.

The National Association of Realtors said sales of existing homes dropped 2.6% in July to a seasonally adjusted annual rate of 7.16 million units, down from 7.35 million in June. The decline was the largest one-month drop in 18 months, but the July figure was still the third-highest on record and 4.7% above the July 2004 pace.

Condominium sales slid 5% to a seasonally adjusted annual rate of 915,000 units, the first setback since February for a segment that has outpaced other housing types this year. Single-family home sales fell 2.3% to a rate of 6.24 million per year.

The retreat was particularly noticeable in the West, a high-priced area that has fueled the market's expansion in recent months. Sales in the region dropped 7.5% from June, spurred by a 13% decline in condo sales. Overall sales were down 3.3% in the Northeast, 1.8% in the Midwest and unchanged in the South.

Despite the fall in sales, the median price of homes rose to $218,000, a robust 14.1% higher than last year. The median price -- the figure at which half sold for more and half sold for less -- decreased 1% for condos to $219,300, but rose 0.5% for single-family homes to $217,900.

Economists have been searching for signs that the housing market is beginning to cool. Some saw the new data as another sign of the beginning of a broader slackening. "I think it signals a slowing," said Nicolas Retsinas, director of Harvard University's Joint Center for Housing Studies. David Lereah, the Realtors association's chief economist, characterized it as a reasonable decline in light of recent highs and said low mortgage rates will continue to aid builders. "It's still a seller's market," he said.

The Realtors survey found an upturn in inventories of unsold houses, a phenomenon that could apply downward pressure on prices and new construction. Total housing inventory levels rose 2.6% in July to 2.75 million homes, the equivalent of a 4.6-month supply of unsold homes. While low by historic standards, it is the highest since November 2003. For condos, inventory shot up to a 5.3-month supply, a 29% jump from June and the highest rate since the survey has tracked the figure.

"All of the sudden, condo inventories are starting to build a little," Mr. Lereah said. "We may be seeing a little sign there that air is starting to come out of the condo balloon."

The Realtors survey is drawn from a large sample of closings on the sale of existing homes, and reflects purchase decisions made in the spring. The organization also has begun to report pending sales; that report is due Sept. 1. The government publishes a separate tally on the construction and sale of new houses.

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