The news yesterday from the National Association of Realtors was bad enough: Sales of existing homes fell in July to their slowest pace in five years. The glut of homes for sale is at a 16-year high. The median price is down for a record 12th month in a row.

What's really grim, though, is this: None of the figures reflect this month's turmoil in the mortgage market. Which is why the numbers will likely be even worse in coming months — and why the NAR doesn't expect the housing market to recover until early next year.

"Unfortunately, worse news lies ahead," said Nigel Gault, U.S. economist for Global Insight. "That will mean more foreclosures and fewer qualified buyers, adding up to lower home sales and prices. It is hard to see a bottom before mid-2008."

The inventory of homes for sale is at its peak since the last housing recession, in 1991. There's a 9.2-month supply of single-family homes and nearly a year's worth of condos.

That's pressuring sellers to cut prices. "Prices would be falling even if all was well in the mortgage market," says Ian Shepherdson of High Frequency Economics. "So in today's troubled circumstances, we have to expect steep declines for the foreseeable future."

The National Association of Realtors reported that sales of existing homes dipped by 0.2 percent in July, compared to June, to a seasonally adjusted annual rate of 5.75 million units.

The median price of a home sold last month slid to $230,200, down by 0.6 percent from the median price a year ago. It marked the 12th consecutive month that home prices have declined, a record stretch.

Still, proving again that all real estate is local, sales in the West and the Northeast managed to rise from June to July and were flat in the South. It was the 2.2 percent drop in sales in the Midwest that weighed down the national numbers.

The deep slump in housing, combined with recent severe turmoil in financial markets, has raised worries about a possible recession. But many economists believe the Federal Reserve will ward off a full-blown downturn by reducing a key short-term interest rate should financial market conditions fail to stabilize.

The rising glut of unsold homes is putting downward pressure on prices. The median price of an existing home, the point where half of homes sold for more and half for less, has now fallen every month for a year, something that has not occurred before on Realtors' records going back to 1969. Economists said to expect more price declines in coming months.

"We are literally swimming in an ocean of homes for sale," said Mike Larson, a real estate analyst with Weiss Research Inc. "Until we work through this extremely large inventory glut, we're not going to see any momentum in home prices."

Analysts said the financial market turbulence that has occurred in August will mean further downward pressure on home sales as big investors such as hedge funds grow more leery about purchasing mortgages that have been packaged into securities for fear that the rising number of defaults will mean they won't get repaid.