Sales of previously owned homes declined in July but still posted their third-best sales pace on record — a sign that the housing market, while slowing a bit, remains in good shape.

The National Association of Realtors reported yesterday that sales of existing homes fell to a seasonally adjusted annual rate of 6.72 million units, representing a 2.9 percent decrease from June's record-high pace of 6.92million units.

Even though the drop in July was steeper than the 2 percent decline some economists were forecasting, the level of sales still was considered buoyant. July's sales were 8.6 percent higher than the pace for the same month last year.

"We're off the highs, but the levels we are at are very, very healthy," said David Lereah, the association's chief economist. He expects sales of previously owned homes to set new record highs for all of 2004.

In the Louisville area, homes sales in July were down slightly from a year ago, but for the first seven months of 2004, sales were up 9 percent from the first seven months of 2003, said Lisa Stephenson, executive vice president of the Greater Louisville Association of Realtors.

Meanwhile, she said, the median sales prices through July of 2004 was $132,000, a slight increase from a year ago.

Lereah said sales dropped nationally because their blistering June pace couldn't be sustained. Some economists said the sluggish job climate in July and high energy prices also may have played a role.

President Bush and his Democratic rival, John Kerry, have sparred frequently about the health of the U.S. economy and the availability of jobs. Job growth slowed dramatically in July, with payrolls expanding by 32,000, the smallest gain since December.

The decrease in existing-home sales in July came despite a recent fall in mortgage rates.

The average rate on a 30-year fixed-rate mortgage was 6.06 percent in July, down from 6.29 percent in June. Rates in July were higher than a year ago.

Last week, rates on 30-year mortgages dropped to 5.81 percent, part of a downward drift as economic activity slowed in the spring and early summer

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