US home sales fall to fresh lows, glut of unsold homes rises
US existing home sales fell 8.0 percent in September as a persistent housing slump continued to weigh on the property market and the world's biggest economy, an industry group said Wednesday.
The National Association of Realtors (NAR) said in a monthly snapshot that sales of existing homes and apartments tumbled to a seasonally adjusted rate of 5.04 million units in September from 5.48 million in August. The drop was worse than expected. Most economists had only expected sales to decline to around 5.25 million.Stripping out apartment sales, sales fell to their lowest level since January 1998. August's sales pace meanwhile was revised down from an original tally of 5.50 million properties. The depth of the housing depression was underlined by an annual reading which showed sales of homes and apartments across the United States have plummeted a hefty 19.1 percent from September 2006.
Sales activity has slowed dramatically and dragged down prices in many areas in the past 12 months in a market downturn which has also forced many mortgage lenders out of business. The national median existing-home price for all housing types was 211,700 dollars in September, down 4.2 percent from a year ago. The glut of unsold homes swamping the market rose 0.4 percent at the end of September to 4.40 million, marking a 10.5-month supply at the current sales pace.
Excluding apartments, the supply of homes has risen to its highest level since February 1988. "Existing homes sales fell sharply in September," said Stephen Gallagher, an economist at Societe Generale. "Potential buyers, those without credit obstacles, had plenty of reason to wait and see hoping for greater supply or declining prices," Gallagher said. Economists are concerned the housing slowdown could put a brake on US economic growth.
The Federal Reserve slashed borrowing costs last month and many economists expect the central bank to trim interest rates again at a policy meeting next Wednesday. The federal funds short term rate is currently pegged at 4.75 percent. Home sales fell the most in the northeast of the country, dropping 10 percent in September, followed by lesser declines in the West, Midwest and South