NEW YORK (CNN/Money) - Sales of existing homes fell 2.9 percent in July, the National Association of Realtors reported Tuesday, a wider decline than Wall Street expected.
July sales came in at an annual rate of 6.72 million, down from the revised 6.92 million pace in June, which was the previous record high, the NAR reported.
Economists surveyed by Briefing.com had forecast that the annual sales pace would fall to 6.81 million from the originally reported 6.95 million, a 2 percent dip.
The NAR said July's existing home sales represented the third-best sales pace on record, with chief economist David Lereah calling changes at this volume of sales relative.
"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 U.S. economic growth," Lereah said in a statement.
According to Lereah, interest rates have continued to decline over the last few weeks, creating conditions that should help keep home sales strong in the months ahead.
Mortgage lender Freddie Mac said the average 30-year, fixed-rate mortgage was 6.06 percent in July, down from 6.29 percent in June. The rate was 5.63 percent in July 2003.
"The fundamental demand from entry level buyers, dominated by the second-largest generation in U.S. history – the children of the baby boom – will drive home sales over the next 10 years because this generation is entering the prime (home-buying) years," added NAR President Walt McDonald in a statement.
The national median existing-home price was $191,300 in July, up 8.7 percent from July 2003 when the median price was $176,000.
Housing inventory levels at the end of July were unchanged from June at 2.4 million existing homes available for sale, representing a 4.3-month supply at the current sales pace.
Regionally, existing-home sales in the South rose 0.4 percent in July to an annual rate of 2.77 million units, up 11.7 percent year-on-year. Existing-home sales in the Northeast slipped 1.4 percent in July at 730,000 units, but were 4.3 percent above July 2003.
Existing homes in the Midwest sold at an annual rate of 1.39 million units in July, down 4.8 percent from June, but 3.0 percent higher than a year earlier.
Home resales in the West declined 6.6 percent in July to an annual rate of 1.83 million units, but were 9.6 percent higher than in July 2003.