Sales of previously owned U.S. homes fell in October to the lowest level in at least eight years as loan restrictions and the prospect of further price declines deterred buyers.
Purchases dropped 1.2 percent, more than forecast, to an annual rate of 4.97 million, the fewest since record keeping began in 1999, from a 5.03 million September pace, the National Association of Realtors said in Washington. Sales were down 20.7 percent from October 2006 and the median home price declined by the most on record.
Defaults on subprime mortgages have prompted banks to tighten lending standards, while foreclosures add to a glut of unsold properties that’s putting pressure on home prices. Lower property values raise the risk that consumers will curtail spending, making businesses more cautious about investing and compounding a slowdown in economic growth, economists said.
“Credit conditions seem to be getting tighter again, the economy is likely to slow and falling prices may be causing people to wait before buying,” David Sloan, senior economist at 4Cast Inc. in New York, said before the report. “There is plenty of downside left in this market.”
Supply of homes on market at 22-year high
Existing-home sales fall 1.2% to 4.97 million pace in October
Sales of existing homes fell further in October even as more homes came on the market, driving the supply of homes to the highest level in 22 years, the National Association of Realtors reported Wednesday.
Sales dropped 1.2% to a 4.97 million seasonally adjusted annualized pace in October, the real estate advocacy group said. The sales pace is the lowest since 1999, when the group began tracking combined sales of single-family homes and condos.
Sales are down 20.7% in the past year and are down 31% from the peak of 7.21 million two years ago.
October sales were stronger than the 4.85 million pace expected by economists surveyed by MarketWatch.
The inventory of unsold homes rose by 1.9% to 4.45 million, representing a 10.8 month supply, the highest since1999.
For single-family homes alone, the inventory of 10.5 months is the highest since July 1985.
The median sales price fell 5.1% in the past year to $207,800. That’s the largest year-over-year price decline ever recorded.
The pace of U.S. existing home sales in the United States fell 1.2 percent in October to
a record low 4.97 million-unit pace, the National Association of Realtors said, amid a nationwide credit crunch and a spike in failing home loans.
The median existing home price of $207,800 was a decline of 5.1 percent from a year ago, a record drop.
The sales pace was the lowest since the realty trade group began tracking both single-family and condo sales jointly in 1999.
From the National Association of Realtors: