The Buffalo Niagara housing market is suffering from a post-tax credit hangover.

Home sales, which soared in June as homebuyers scrambled to close their deals in time to claim a tax credit of as much as $8,000, plunged by 37 percent in July, after the incentives expired.

Despite the slump in sales, the median home price remained fairly stable, slipping by 1 percent to $117,177 in July from $118,600 a year earlier.

The decline in July home sales had been expected, since economists and real estate officials predicted that the tax credit would cause buyers to move up their purchases to take advantage of the incentive.

Once the tax credit ended, they predicted that sales volumes would drop off, although the big questions going forward are how long the hangover will last and how severe it will be.

While mortgage rates remain near the lowest levels in decades, the sluggish economy and tougher credit standards imposed by lenders continue to restrain many potential buyers, said John Leonardi, the executive director of the Buffalo Niagara Association of Realtors.

“I think we’re finding that people are having trouble getting mortgages,” he said Thursday. “If you don’t have a credit score in the 700s, really good credit and a 20 percent down payment, it’s really tough.”

The number of home sales that closed during July slumped to 721, the fewest in at least a dozen years and far fewer than the 1,153 in July 2009, according to statistics released Thursday by the real estate group.

Pending sales, for homes that have a signed contract but haven’t yet closed, plunged for the second straight month, dropping 23 percent in July after falling 29 percent in June. A total of 720 units came under contract in July, down from 938 a year ago. That also was the lowest July total in at least a dozen years.

Still, the power of the tax credit in pulling sales forward is reflected in the 3 percent increase in pending sales over the first seven months of this year. Closed sales are down by 4 percent through the first seven months of this year.

“Homes are maintaining their value. That’s the positive thing,” Leonardi said. “The [issues are] credit worthiness and what’s going on in the economy.”

With sales slowing down, the supply of homes on the market has been steadily increasing, rising by 11 percent to the highest level for any July since 1999. The growing inventories translate into about a seven-month supply of homes on the market, the highest in a decade.

For most of the last decade, inventory levels equal to or less than a six-month supply had bolstered local home prices. The growth in listings eases some of the upward pressure on home prices by giving buyers more choices.