U.S. Economy: Sales of Existing Homes Decline to 10-Year Low (Bob Willis)

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July 24 (Bloomberg) -- Sales of previously owned U.S. homes fell in June to the lowest level in a decade as tumbling real-estate prices and consumer confidence signal no end in sight to a housing recession now in its third year.

Resales dropped 2.6 percent to a lower-than-forecast 4.86 million annual rate from a 4.99 million pace the prior month, the National Association of Realtors said today in Washington. The median home price dropped 6.1 percent from June of last year.

The housing slump may deepen further after mortgage rates climbed to the highest in a year this month and turmoil engulfed Fannie Mae and Freddie Mac, which account for more than two- thirds of new home-loan financing. A record 18.6 million homes stood empty in the last three months as the industry's recession reverberated through communities, separate figures showed today.

The NAR report ``is, unfortunately, not telling us about an end'' to the slide, said David Resler, chief economist at Nomura Securities International Inc. in New York. ``Housing is going to be a non-contributor, if not a drag, on the overall economy.''