Northwest Indiana existing single-family home sales fell sharply in July, as the effects of homebuyer tax credits finally waned.

Sales tumbled 31.6 percent in July as compared to the same month one year ago in the five counties covered by the Greater Northwest Indiana Association of Realtors, according to association figures.

The plunge in sales follows two months of strong sales locally, as home buyers raced to cash in on homebuyer tax credits worth up to $8,000 by closing deals, according to Larry Hitz, broker/owner of Prudential Executive Group Real Estate in Valparaiso.

With the boost from the tax credits, sales so far this year in Lake and Porter counties were on par with sales in 2008. It marked the first time in several years that year-to-date home sales had not fallen from the year before, Hitz said.

Now, Realtors are waiting to see whether the July numbers represent a trend or if sales will again rebound.

"August will tell us and September will tell us if we are truly crawling out of the tank," Hitz said.

Nationally, sales of existing single-family detached homes fell to an annualized rate of 3.37 million in July, representing a 25.6 percent drop from sales in July 2009, according to the National Association of Realtors. The July number is the lowest level for sales since May 1995.

"Consumers rationally jumped into the market before the deadline for the homebuyer tax credit expired, said National Association of Realtors Chief Economist Lawrence Yun.

Yun noted that interest rates still remain at historically low levels, with the average commitment rate for a fixed 30-year mortgage dropping to 4.56 percent in July from 4.74 percent in June. The comparable rate in July 2009 was 5.22 percent.

In Northwest Indiana, the median selling price of an existing single-family home dropped to $125,000 in July, a 3.8 percent drop from the July 2009 median selling price of $129,000, according to the Greater Northwest Indiana Association of Realtors.

The association represents Realtors and collects data in Lake, Porter, LaPorte, Jasper and Newton counties.