INSTANT VIEW: Existing home sales pace falls in June

NEW YORK (Reuters) - The pace of existing home sales in the United States fell in June to a 4.86 million-unit annual rate, the National Association of Realtors said in a report on Thursday that saw the sales volume hit a 10-year low.

KEY POINTS: * Economists polled by Reuters were expecting home resales to fall to a 4.93 million-unit pace, from the 4.99 million rate initially reported for May. The June rate was the lowest since a 4.83 million rate in early 1998, the Realtors said. * The inventory of homes for sale held steady at 4.49 million homes or an 11.1 months' supply at the current sales pace. The median national home price declined 6.1 percent from a year ago to $215,100.

COMMENTS:

STEPHEN MALYON, SENIOR CURRENCY STRATEGIST, SCOTIA CAPITAL, TORONTO:

"It just underscores that the U.S. economy is by no means out of the woods and that the run of strength that the dollar has enjoyed over the past several sessions is unlikely to extend too much further as the market turns its focus to the deteriorating fundamentals backdrop in the U.S. (As for the data), the headline speaks for itself. This is going to continue to exert downward pressure on home prices and that's where this whole slowdown begins, the destruction of household balance sheet wealth, due to declining home prices and how this puts homeowners in a negative equity position."

T.J. MARTA, FIXED INCOME STRATEGIST, RBC CAPITAL MARKETS, NEW YORK:

"Sales will only pick up enough to burn off the excess inventories with another leg down in prices, and this will lead to another round of hits to personal balance sheets, and the resulting negative wealth impact on spending (down) and savings (up)."

MICHELLE MEYER, ECONOMIST, LEHMAN BROTHERS, NEW YORK:

"Existing home sales came in below our expectations, but it was not surprising. Existing home sales should continue to fall, but we are close to reaching a bottom, which should be in the fall. There is definitely risk to the downside with what is happening in the mortgage market. What is noteworthy was that inventory was at 11.1 months, which is close to the record high. In a normal environment it should be at 5 months. There is a growing imbalance in the existing home market."

BILL CHENEY, CHIEF ECONOMIST, JOHN HANCOCK FINANCIAL SERVICES, BOSTON:

"There's no way to spin this as good news.

"On the whole, I still think that the quicker prices get down the quicker sales will recover, but they're not doing it yet.

"My gut feeling is that a lot of the pain has already happened and prices probably don't need to go down a whole lot further. Then what needs to happen is that people need to come out of their shells and accept that this is the true price and it's not going to go down a lot further so that buyers and sellers will come out of the woodwork and buy and sell houses.

"Honestly we've never been through this kind of magnitude of price cycle before, at least not sort of in living memory. So nobody really knows what it will take to shake the sellers out of their denial and get buyers convinced that they shouldn't wait any longer.

"The housing bill is definitely a plus. Anything that helps people stay in the their homes and not get foreclosed on, anything which helps the mortgage market so that it puts a few more buyers into the pool of people who are able to get out there and make an offer, those are all good things. Whether it's enough to turn the corner, it's anybody's guess."

RICHARD DEKASER, CHIEF ECONOMIST, NATIONAL CITY CORP., CLEVELAND: