Home sales in America slumped to a four-year low and prices fell in a third of American cities as turmoil in the mortgage market took its toll on housing, the National Association of Realtors said.

Home sales, including single-family houses and condominiums, dropped in the second quarter to 5.91 million at an annualized pace, the lowest since the second quarter of 2003, led by declines in Florida and Nevada, the Chicago-based real estate trade group said in a report yesterday. The median price for a single-family home fell in 50 of 149 metropolitan areas studied by the association.

Investor demand for mortgage bonds has dried up, toppling more than 70 mortgage companies and half a dozen hedge funds since the start of last year. Countrywide Financial Corp., the largest American lender, could face “effective insolvency” because of the credit crunch, a Merrill Lynch & Co. analyst in San Francisco, Kenneth Bruce, said in a research note yesterday.

“Recent mortgage disruptions will hold back sales temporarily,” an economist with the trade group, Lawrence Yun, said.

Earlier this week Wal-Mart Stores Inc. and Home Depot Inc., the two largest American retailers, said rising mortgage defaults and tumbling home sales will depress earnings for the year. The housing slump probably will shave 1 percentage point off American economic growth this year, the realtors said in an August 8 forecast. GDP growth probably will slow to 1.9% in 2007 from 2.9% last year, the trade group said.

The American median home price, the point at which half the homes sold for more and half for less, was $223,800 in the second quarter, down 1.5% from a year ago when it was $227,100, the association said in yesterday’s report. In the first quarter, the median fell 1.8% from a year earlier and almost half of the cities in the study had price declines.

In a separate report, an index gauging confidence among American homebuilders fell in August to the lowest since 1991, the sixth consecutive decline, as restrictions on lending took a toll.

The National Association of Home Builders/Wells Fargo index of builder confidence declined to 22, from 24 in July, the Washington-based association said yesterday. A reading below 50 means most respondents view conditions as poor.

“We’re dealing in a difficult market environment,” the president of the group, Brian Catalde, said in a report.

Home sales fell in 41 states in the quarter, increased in six states, and remained unchanged in South Dakota. New Hampshire and Hawaii did not have data available, the trade group said.

Florida had the biggest American sales decline, at 41%. Nevada tumbled 37% and Arizona fell 23%, according to the report.

Wyoming had the biggest sales gain, up 11% from a year ago. In Iowa, sales rose 4.1%. North Dakota saw an increase of 2.9%. Oklahoma, Indiana, and Nebraska all posted gains.

The biggest price losses in the second quarter were in Elmira, N.Y., down 18% and Palm Bay, Florida, dropping 15%. Sarasota, Fla., and Davenport, Iowa, tied for third place, down 11.3%.