U.S. home sales fall to 15-year low

Sales in the U.S. of previously occupied homes plunged in July by 27 per cent from the month earlier, to their lowest level in 15 years.

The National Association of Realtors said Tuesday that sales fell to a seasonally adjusted annual rate of 3.83 million.

It was the largest monthly drop in 42 years.

The association also revised June's sales total down to 5.26 million, based on up-to-date information.

The fall came despite the lowest mortgage rates in decades and bargain prices in many areas.

Sharp declines were recorded in all regions of the country and were especially weak among homes priced in the lower to middle ranges.

The inventory of unsold homes grew to nearly four million in July. That's a 12.5-month supply at the current sales pace, the highest level in more than a decade. It compares with a healthy level of about six months.

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

Home sales picked up in the spring when the government was offering tax credits. But the tax credits expired on April 30 and the market has been hobbled since.