Sales of existing homes fell 4.3 percent in 1990 as the faltering U.S. economy and uncertainty over the Persian Gulf crisis took their toll on the housing industry, according to figures compiled by the National Association of Realtors.
The trade group said sales of previously owned single-family homes totaled 3.29 million in 1990, compared with 3.44 million a year earlier. It was the lowest number of sales since 3.21 million homes were sold in 1985.
Although existing home sales rose 2.2 percent in December, to a seasonally adjusted annual rate of 3.22 million units, the improvement was based solely in the Midwest. Elsewhere, sales continued to slide.
The December increase followed a 3 percent advance a month earlier, the first gain since August.
The realty group attributed the improvement to declining mortgage rates, which edged downward throughout the final quarter of 1990 following a spurt after Iraq invaded Kuwait Aug. 2.
A Federal Home Loan Mortgage Corp. survey showed the average rate for a 30-year, conventional fixed-rate mortgage was 9.68 percent by the end of December.
The realty group said the national median price of an existing home in 1990 was $95,500, up 2.6 percent from 1989.
But the median price in December was just $91,900, down 4.6 percent from January 1990 and reflecting the falling values of homes in many areas of the country.
Median prices during 1990 had peaked at $98,300 last July. The median means half of the homes cost more, half less.
The South posted the only regional increase in existing home sales for the year, up 0.2 percent to 1.21 million units. However, the December resale rate was down 2.3 percent from November.
Sales in the Midwest were up 15.9 percent in December, although they were down 2.5 percent for the year for a total of 896,000 units.
In the Northeast, sales were 3.9 percent below the November rate. Sales for the year totaled 517,000 units, down 12.2 percent from 1989.
Sales in the West were down 0.2 percent from November. For the year, they fell 6.7 percent to 569,000 units.