Talking about Existing home sales sink; stocks tumble

 Full Story Existing home sales sink; stocks tumble — MSN Money

Home sales fell in July much more than expected, rekindling worries about whether the housing market would crash and about the overall economy’s health. The news sent stocks lower for the third day in a row.

Sales of existing homes sank 4.1% to an annual rate of 6.33 million units, the National Association of Realtors reported. That’s below the 6.55 million units that economists had predicted and the lowest rate since January 2004. The rate is down 11.2% from a year ago.

The inventory of homes for sale surged 3.2% to 3.86 million units — about a 7.3-month supply. That’s the largest one-month rise in inventories ever and the highest supply since April 1993, CNBC’s Diana Olick reported.

David Lereah, the chief economist for the realtors group, said the inventory jump was the most worrisome part of the report. "I’ve never seen an increase like this — ever," he told CNBC.

The median price of an existing home sold ticked up 0.9% from the year-ago period to $230,000. Sales slipped across the country, especially in western states and the Midwest — dropping 6.4% from June in the West and 5.9% in the Midwest.

Today’s report is the latest in a string of negative housing news, with home builder Toll Brothers’ (TOL, news, msgs) cutting profit estimates and home improvement chain Lowe’s (LOW, news, msgs) stumbling in its latest quarter.

Home-related stocks tumbled on the housing news. Toll Brothers was off 2.8%. Pulte Homes (PHM, news, msgs) was off 3.1%, and D.R. Horton (DHI, news, msgs) was off 2.4%. Home Depot (HD, news, msgs) and Lowe’s (LOW, news, msgs) were down 1.3% and 2.8%, respectively, and appliance giant Whirlpool (WHR, news, msgs) dropped 1.1%.

Tomorrow, the Commerce Department releases its report on new home sales, with economists predicting sales to drop to an annual rate of 1.105 million units from 1.131 million in June.