Figure Is Down 20% From 2006
Associated Press
Tuesday, January 1, 2008
Sales of previously owned homes nudged up in November, but that didn't improve the broader picture of a feeble housing market racked by record-high foreclosures and harder-to-get credit.
The National Association of Realtors yesterday reported that sales of existing single-family houses, condominiums and townhouses rose 0.4 percent in November from October, to a seasonally adjusted annual rate of 5 million units. Even with the small increase, the pace of sales was the second-lowest since 1999. The lowest pace -- 4.98 million -- was registered in October.
"There's little reason to pop open any champagne corks," said Mike Larson, a real estate analyst at Weiss Research in Florida.
Sales are down 20 percent from November 2006, underscoring the problems plaguing the housing industry. Economists were expecting sales to either move up slightly or hold steady for November.
Home prices continued to sink. The median price of a home sold in November was $210,200. That marked a 3.3 percent drop from a year before. It was the fifth-biggest annual decline on record. The median price is the point at which half sell for more and half sell for less.
On Wall Street, the bump up in nationwide home sales failed to ease investors' fears about the economy's outlook. The Dow Jones industrials fell 101.05 points to close at 13,264.82.
"There is no doubt that housing is weak and will be weak in 2008," said Ken Mayland, president of ClearView Economics.
The inventory of unsold homes in November was 4.27 million. At the current sales pace, it would take 10.3 months to exhaust that overhang.
"Inventory is still high, and further reduction in prices may be required in some areas to induce buyers back into the market," said the Realtors association's chief economist, Lawrence Yun.
A dip in 30-year-mortgage rates in November probably helped give nationwide existing-home sales the small boost in November, the association suggested.
A credit crunch that took a turn for the worse in the summer has aggravated housing problems. It has made it more difficult for people to secure financing to buy a home.
The housing market has been suffering through a severe slump after record-breaking activity from 2001 through 2005. Sales turned weak, as did home prices. The boom-to-bust situation has increased dangers to the economy as a whole and has been especially hard on some homeowners.
Foreclosures have soared to record highs. A drop in home prices left some people stuck with balances on their home mortgages that eclipsed the value of their homes. Other homeowners were clobbered as low introductory rates on their mortgages jumped.
"A significant number of mortgages reset in early 2008 will likely increase delinquencies and foreclosures driving prices lower and pushing buyers away," said Benjamin Reitzes, economic analyst at BMO Capital Markets Economics. "This could get even worse before it gets better."
On Friday, the government reported that new-home sales plunged by 9 percent in November to a pace of 647,000, the lowest in more than 12 years.
View all comments that have been posted about this article.