US existing home sales, prices fall in October

Source : Business Times - 24 Nov 2008

The pace of sales of existing homes in the United States fell 3.1 per cent in October to a 4.98 million-unit annual rate, while the median home price dropped to its lowest in more than four years, a National Association of Realtors (NAR) report showed on Monday.
Economists polled by Reuters were expecting home resales to set a 5.00 million-unit pace. September’s figure was revised downwards to 5.14 million from 5.18 million.
‘Many potential home buyers appear to have withdrawn from the market due to the stock market collapse and deteriorating economic conditions,’ said Lawrence Yun, NAR chief economist.
The inventory of existing homes for sale slipped 0.9 per cent to 4.23 million from 4.27 million in September. The median national home price declined 11.3 per cent from a year ago to US$183,300, the lowest since March 2004 when the median price was US$183,200.
The percentage drop in prices was the biggest since the NAR started keeping records in 1968.
‘We have favourable affordable conditions, but we need more than that to give buyers with jobs the confidence they need.
Without home price stabilisation, there will not be an economic recovery,’ Mr Yun told reporters.
The housing malaise, which triggered a global financial crisis, has infected other sectors of the broader economy, translating into the highest unemployment rate in 14 years and a record drop in retail sales.
Analysts say stability in the housing sector is key to any recovery in the US economy, which independent surveys say is in recession.