Existing Home Purchases Fail To Meet Expectations

A new report reveals that the number of Americans who invested in an existing home - including a townhome, single-family unit, co-op or condominium - during the month of July was well below what analysts had predicted, indicating that real estate recovery is still volatile.

According to the National Association of Realtors, the number of individuals who completed transactions for an existing home purchase dropped 27.2 percent to 3.83 million units. This figure represents a steep decline from the 5.26 million units analysts projected. NAR chief economist Lawrence Yun commented that he expects this trend to continue in the coming months and will most likely turn around when job growth picks up.

"Consumers rationally jumped into the market before the deadline for the homebuyer tax credit expired. Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September," Yun said.

Millions of potential homebuyers may be delaying a home purchase and opting instead for saving money or focusing on debt relief from credit cards, student loans or medical bills. Separate reports also reveal that more Americans plan to rent for at least two more years while the economy improves before they begin their home search.