Sales of US homes plunged last month to their lowest point since January 2004, according to data on Wednesday that reinforced signs that the long-booming property market is hitting the brakes hard.
The latest report from the National Association of Realtors (NAR) also showed that the stock of unsold homes on the market hit a 13-year high last month.
That has worrying implications for consumer spending in the world's largest economy.
Sales of existing homes fell 4.1 percent from June to a seasonally adjusted annual rate of 6.33 million units last month, the NAR said.
The figure was down a hefty 11.2 percent from the sales pace of July last year, and marked the worst performance since only 6.08 million homes were sold in January 2004.
"Once upon a time there was a housing market that allowed homeowners to print money. Those days are gone," said Joel Naroff of Naroff Economic Advisors.
The report depressed Wall Street share prices. The Dow Jones index finished down 41.94 points at 11,297.90.
"It's raising the question whether there is a soft or a hard landing of the economy. A hard landing could drag to a recession," said SW Bach equity analyst Peter Cardillo.
Two weeks ago, the Federal Reserve called off a campaign of rate hikes stretching back to mid-2004 in recognition that major sectors of the US economy including the property market are slowing markedly.
The government was due to release last month's figures for sales of new homes yesterday. Wall Street economists expect a fall to 1.105 million from June's weak figure of 1.131 million.
NAR chief economist David Lereah said higher interest rates had dampened sales in recent months, but that softening prices should now lure buyers back into the market.
"Many potential home buyers have been on the sidelines, some `kicking the tires,' but mostly waiting for sellers to compromise on prices and terms," he said.
"Now sellers in many areas of the country are pricing to reflect current market realities. As a result, there could be some lift to home sales, but it'll likely take some months for price appreciation to rise," he said.
The NAR report showed that total inventory levels rose 3.2 percent at the end of last month to 3.86 million existing homes available for sale, which represents a 7.3-month supply at the current sales pace.
That is the highest level since April 1993, when there was a 7.5-month supply of unsold homes.
The national median price for an existing home rose 0.9 percent year-on-year last month to US$230,000, the NAR said.
Sales of existing homes fell in every region of the US last month. Median prices fell in the Northeast, the Midwest and the West. Only a 3.2 percent rise in prices in the South kept the national median price up.
However, NAR president Thomas Stevens urged sellers not to panic.
"Considering that typical sellers have been in their home for six years, the average appreciation during that time is close to 60 percent," he said.
"This demonstrates the value of housing as a long-term investment. The longer you own, the better your return," Stevens said.
But much of the recent housing boom was driven by speculative developments, especially of larger family homes and condominiums, which appear now to be turning sour.
On Tuesday, luxury US home builder Toll Brothers said that its profits slumped 19 percent to US$174.6 million in the latest quarter, and announced it was scaling back new building operations.