Fewer people in Utah and the nation bought previously occupied homes in May, lowering sales to their weakest point of the year.

Sales in the U.S. sank 3.8 percent last month, to a seasonally adjusted annual rate of 4.81 million homes, the National Association of Realtors said this week. That's far below the roughly 6 million annual sales rate typical in healthy housing markets.

Preliminary sales numbers for Salt Lake County show sales in May were down 20 percent from a year ago, according to the Salt Lake Board of Realtors. The median selling price last month was $187,000, down nearly 7 percent from the same month last year, the board said.

The housing boom nationally went bust in 2006, with the Wasatch Front's market taking a dive in 2007. Sales since have been on the decline; analysts say they expect sales nationally to level off at about 5 million a year. That's not much better than the 4.91 million homes sold last year, the worst showing in 13 years.

The depressed housing market has weighed on the broader economy. Declining home prices have kept people from selling their houses and moving to find jobs in growing areas. They have also made people feel less wealthy. That has reduced consumer spending, which drives about 70 percent of economic activity.

One sign of the housing industry's struggles is that fewer first-time buyers are entering the market. The number of first-timers ticked down to 35 percent of sales last month. In healthy times, they drive about half of sales.

First-time buyers are critical because they tend to improve their properties and invest in their communities, a combination that raises home values. And their purchases allow sellers to move up to pricier homes.

Instead, the market has been saturated with foreclosures, which force prices down. Sales of homes at risk of foreclosure fell in May. But they still made up 31 percent of all purchases. And many pending foreclosures are backlogged in the courts or held up by state and federal probes into questionable foreclosure practices by lenders.

Until the glut of foreclosures are cleared and people think it's a safe time to buy, "it is unlikely that home prices can recover on a sustained basis," said Steven Wood, chief economist at Insight Economics.

Bigger required down payments, tougher lending rules, heavy credit-card and student-loan debt, and a shortage of desirable starter homes are keeping many would-be buyers away. Even some who do have enough money for a down payment and a solid credit history are holding off, worried that home prices will keep falling.

Investors are filling some of the void. They are spending cash to scoop up deeply discounted homes in hard-hit areas of Phoenix, Las Vegas and Tampa, Fla. Last month, investors accounted for 19 percent of all sales.

All the while, previously occupied homes are cheap and in great supply.

Re-sold homes are a bargain compared with new homes. The median sales price for a previously occupied home in May was $166,500. The median price of a new home is nearly 31 percent higher than the price for a re-sale — around twice the normal markup.

Sales fell across most regions in May. Sales dropped 6.4 percent in the Midwest, 5.1 percent in the South and 2.5 percent in the Northeast. There was no change in the West.

Tribune reporter Lesley Mitchell contributed to this story.