Purchases of existing homes likely slumped in July

Sales of previously-owned homes likely plunged in July to the lowest level since March 2009, further evidence the market is restrained by foreclosures and slagging job growth.

Purchases dropped 13.4% from June to a 4.65 million annual rate, according to a Bloomberg survey. A decline would be the third in a row.

An $8,000 tax credit boosted sales earlier in the year, but with unemployment close to 10% and foreclosures peaking, not even record low mortgage rates are enough to allow people to buy.
The report from the National Association of Realtors is due at 10 a.m. EST today and Wall Street will watch it closely for clues into where the economy is headed.

Housing's inability to build on the temporary boost generated by government help is one reason the economy is still lagging. More than 20% of the nation's homes are underwater, or more money is owed to the bank then they are worth.