U.S. sales fall for the third consecutive month to the lowest rate since 1999, pushing down stocks and fueling fears of a 'double dip' in the housing market.
The end of a popular government stimulus program drove home sales in July to their lowest levels in more than a decade, fueling fresh concerns about the economic recovery.
Home sales fell 27.2% nationwide from a month earlier, the National Assn. of Realtors reported. That was a much bigger drop than expected, as the boost evaporated from a now-expired federal tax credit that had been driving sales this spring. The plunge came despite rock-bottom rates on home loans.
Concern over the summer swoon reverberated from Wall Street to the White House. The Dow Jones industrial average briefly slid below the 10,000 benchmark and was down 1.3% on the day.
"You are seeing the sales drop off a cliff again, and that is really starting to scare people," C.J. Jones, head of institutional trading at Nollenberger Capital Markets, said Tuesday. "Are we going to have a double dip? Nobody knows."
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White House Deputy Press Secretary Bill Burton acknowledged that the drop-off probably was largely due to the expiration of the home-buyer tax credit and called the 27.2% decline a "tough number."
"There's a lot more work yet to do," Burton said.