The National Association of Realtors reported that existing home sales fell 5.1 percent in June, down from an annual rate of 5.66 million units in May to just 5.37 million units last month, the lower sales total attributed to the end of the homebuyer tax credit.

As shown below, what is interesting about the recent decline is that sales peaked a full two months before the tax credit expired instead of during the same month that the government giveaway ended, as was the case when the first round of tax cuts expired last fall.

Note that in the graphic above, sales totals during the last month of the tax credit in November and June are shaded black in order to better see how different an impact the end of the tax credits had on sales. While seasonal adjustments are no doubt involved, the decline in sales during May and June are likely evidence of very little demand left to be “pulled forward”, what is widely seen as the fundamental flaw in this program.

Also note that, in comparison to the 17 percent decline from last November to December, there  has already been a decline of 7 percent from the April peak that was a full 12 percent lower than the peak sales rate back in November. Moreover, looking at June sales versus December sales, it’s clear to see that last month’s sales are now already below the December post-tax credit level before the most recent tax credit expired!

With inventory rising at the same time that sales are tumbling, the months of supply metric increased to the highest level since last August, from 8.3 months in May to 8.9 months in June.

Lawrence Yun, NAR chief economist, is not optimistic about sales this summer:

June home sales still reflect a tax credit impact with some sales not closed due to delays, which will show up in the next two months. Broadly speaking, sales closed after the home buyer tax credit will be significantly lower compared to the credit-induced spring surge. Only when jobs are created at a sufficient pace will home sales return to sustainable healthy levels.

The supply of homes on the market is higher than we’d like to see. But home prices are still holding their ground because prices had already overcorrected in many local markets.

Home prices were up 1.0 percent from a year ago at a median sales price of $183,700 and distressed sales accounted for 31 percent of June sales, unchanged from May.

First time homebuyers accounted for 43 percent sales in June, down from 46 percent in May, and investors were behind 13 percent of purchases, down slightly from 14 percent in May.