Tuesday April 22, 08:35 PM
Monthly sales report shows housing still mired in slump
By Rob Lever
WASHINGTON (AFP) - Sales of existing US homes slid further in March, an industry group reported Tuesday, in a report underscoring the extended slump in the housing market.
The report showed a monthly drop of two percent and 19.3-percent plunge year-over-year in existing home sales, the largest segment of the housing market.
The National Association of Realtors said the annualized sales pace was 4.93 million, weaker than the 4.95 million expected by Wall Street economists. Sales resumed their decline after a slight uptick in February.
This reflects a meltdown in the property market after years of sizzling growth and a speculative bubble. The boom-and-bust has slammed the entire economy and led to rising foreclosures and massive losses for banks.
The median existing-home price for all housing types was 200,700 dollars in March, down 7.7 percent from a year ago.
The association said existing home sales have been uneven with the steepest declines in high-cost areas, providing "a downward pull to the national median" price.
Lawrence Yun, NAR chief economist, said the problems in the banking sector are also having an effect on the market.
"Though mortgage rates are at historically low levels, some borrowers are facing restrictive lending practices in declining markets," he said.
"At the same time, many buyers continue to bide their time with a large number of homes to choose from, while other potential buyers remain on the sidelines."
In another sign of the troubles for housing, inventory rose 1.0 percent at the end of March percent to 4.06 million existing homes. That represents a 9.9-month supply at the current sales pace, up from a 9.6-month supply in February.
Single-family home sales fell 2.7 percent for the month are 18.4 percent below pace in March 2007, the report showed. The median existing single-family home price was 198,200 dollars in March, down 8.3 percent from a year ago.
Existing condominium and co-op apartment sales rose 3.6 percent for the month but are 25.5 percent below the level a year ago. The median existing price for this segment was 2.8 percent lower than March 2007.
Marie-Pierre Ripert, economist at Ixis Corporate and Investment Bank, said the glut of homes on the market "suggests that the downward correction in the housing market is not over."
Economist Sal Guatieri at BMO Capital Markets agreed.
"There is still little evidence of stabilization in US housing markets, though the recent pace of decline in sales has slowed," he said.
"House prices should keep falling until the massive glut of unsold homes is absorbed by rising demand. Sales will eventually benefit from improved affordability, but the near-term picture remains clouded by ongoing job losses and more discriminating lenders."
Robert Brusca at FAO Economics said the true picture is hard to determine because some homeowners may be waiting for a recovery to put their properties up for sale.
"So the housing mess drags on, but remember that with existing homes it's hard to gauge where we stand since not all these sellers are likely to be committed sellers," he said.
"With the warm weather end of the school-year and summer coming on more houses could be put back on the market to test the waters."
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