The housing bears were right: existing home sales fell off a cliff in July. As my colleague Megan McArdle just noted, they sold at an annualized pace of 3.83 million, down by 27% versus June and 26% below July 2009, according to the National Association of Realtors. This is the lowest rate since NAR began keeping track of monthly sales in 1999. It's also far worse than the rate of 4.7 million sales that the market expected. To understand just how bad July was for home sales, let's look at some charts.
First, here's existing sales since the financial crisis:
At no point, even when the recession and crisis were at full strength, were existing sales nearly so low -- they never even dipped below 4.5 million. If you look at how wild existing sales were during the housing bubble, then July's number looks even more painful:
That tiny bar to the far right is July. During the height of the bubble, sales were around twice what they were last month. And as you can see, as long as the NAR had been keeping records, no month had been close to this low.
July reflects the first month when existing home sales received no benefit from the home buyer credit, which partially explains the huge drop. But the numbers also make clear that demand for homes is extremely weak at this time, despite very low mortgage rates.