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Sales of existing homes slumped in July to an annualized pace of 3.83 million units, the National Association of Realtors reported Tuesday.

The news only serves to reinforce the housing market's recent weakness: New-home sales slumped in May to their lowest level since the early 1960s, Commerce Department data shows. Sales of new homes rebounded in June but remain well below their year-ago level.

According to the NAR, existing-home sales fell 27.2 percent between June and July, despite mortgage rates at or near all-time lows. Rates have hovered around the 4.5-percent mark for the last several weeks, according to the Mortgage Bankers Association - but demand for purchase loans has remained lackluster as consumers avoid taking on new debt.

Despite the weak data, NAR chief economist Lawrence Yun was bullish about the housing market's prospects. "Given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs," he said.

But job creation has been sluggish of late - and there's little reason to believe it will pick up in the coming months.

By Steve Monfort

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