WASHINGTON, Aug 24 (AFP) - US existing home sales tumbled 2.9 percent in July but the pace was still the third-fastest on record, boosted by cheap mortgages, an industry survey showed Tuesday.
Existing home sales fell to a seasonally adjusted annual rate of 6.72 million homes in July from a record 6.92 million in June, the National Association of Realtors (NAR) said.
It was the third highest rate of sales on record, albeit a little weaker than expected by analysts.
"Prior to this year, the July sales pace would have been a real eye-popper," said NAR chief economist David Lereah.
"The fact is it remains so. The present level of home sales activity is considerably above last year`s record, and the new benchmark we`ll set in 2004 is a significant contributor to overall US economic growth."
The national median, or middle-of-the-range, existing-home price was 191,300 dollars in July, up 8.7 percent from July 2003.
Cheap mortgages kept the market humming.
According to mortgage wholesale giant Freddie Mac, the national average rate for a 30-year fixed-rate mortgage was 6.06 percent in July, down from 6.29 percent in June.
As of August 19, the rate had declined further to 5.81 percent.
"The 30-year fixed-rate mortgage is now in the range of 5.8 percent, which will preserve favorable housing affordability conditions and help to keep home sales historically strong in the months ahead," Lereah said.
NAR president Walt McDonald said low mortgage interest rates were only part of the picture.
"The fundamental demand from entry level buyers, dominated by the second-largest generation in US history -- the children of the baby boom -- will drive home sales over the next 10 years because this generation is entering the prime years in which people typically buy their first home," he said.
Housing inventory levels at the end of July were unchanged from June at 2.40 million existing homes available for sale, enough to last 4.3 months at the current sales pace, the NAR said.