Sales of previously occupied homes dipped 2.2 percent in May, signaling that a boost from home-buying tax credits is fading sooner than expected.
Last month's sales fell from the previous month to a seasonally adjusted annual rate of 5.66 million, the National Association of Realtors said Tuesday. Analysts who had expected sales to rise expressed concern that the real estate market could tumble once the benefit of the federal incentives is gone entirely, starting next month.
Sales have climbed 25 percent from the 4.5 million annual rate hit in January 2009 -- the lowest level of the recession. But they're still down 22 percent from the peak rate of 7.25 million in September 2005.
In Western New York, the Buffalo Niagara Association of Realtors has again changed its reporting process for its regional sales figures, and won't report May results until early July. In the past, they would have been available by June 15.
The trade group has been struggling with what it says are inaccurate numbers for months, since the Western New York multiple listing service merged or affiliated with equivalent systems in nearby counties as well as in the Rochester and Syracuse regions.
The Buffalo Niagara system used to automatically convert pending sales to closed sales, but switched to the manual entry system used by the other MLS services. Officials say local brokers have not completely adjusted and aren't manually marking their pending sales as closed, resulting in what they say are artificially low closed sales results.
"This was a business decision," said John Leonardi, BNAR's CEO. "Plus, we see waiting an extra 15 to 17 days to report data as being more accurate."
The national report counts home sales when a deal closes. So federal tax credits of up to $8,000 for homebuyers likely influenced May's results. The deadline to get a signed sales contract and still qualify was April 30. Buyers must close their purchases by the end of this month.
The tax credits were expected to lift sales in May and June. Lawrence Yun, the Realtors' chief economist, said delays in the mortgage-lending process put about 180,000 potential buyers in limbo. He's unsure if they will qualify by the June 30 deadline.
The drop in May sales was led by a more than 18 percent decline in the Northeast.
News business reporter Jonathan D. Epstein contributed to this report.