US Home Sales Rise 5.5%, Signaling a Possible Bottom
REAL ESTATE, ECONOMY, HOUSING, FEDERAL HOUSING ENTERPRISE OVERSIGHT, FINANCE,
MORTGAGE
Reuters
| 24 Oct 2008 | 11:20 AM ET
Sales
of previously owned U.S.. homes rose 5.5 percent last month, the biggest
gain since July 2003, and the inventory of unsold homes fell, a hopeful
sign for a housing market mired in a long slump.
The
National Association of Realtors said Friday that sales of existing
homes rose to a 5.18 million-unit annual rate from the 4.91 million
unit pace set in August. Economists had expected sales to rise to only
a 4.93 million unit rate.
It was the first time the sales pace had risen above its year ago level in
three years, a sign the market could be stabilizing.
The
surprisingly large jump in sales pushed the inventory of unsold homes
down by 1.6 percent to 4.27 million, or a 9.9 months' supply at the
current pace.
While the inventory is still uncomfortably high, the decline is welcome news
for a housing market mired in a deep slump.
Home prices, however, showed no signs of escaping their long, deep slide.
The
median national home price declined 9 percent from a year ago to
$191,600, the lowest level since April 2004, the industry trade group
said.
The increase in sales was spurred by
a rise in foreclosure and other 'distress sales' in regions of the
country hard-hit by the ongoing housing downturn, said the Realtors'
chief economist, Lawrence Yun.
"In some
regions, the lower prices are seeing buyers return to the marketplace,"
he said. "This was a nice jump and hopefully this trend can continue
because the first step to stabilizing the market is an increase in home
sales."
Sales
rose in three regions, with the West recording a 16.8 percent jump. The
Midwest saw an increase of 4.4 percent and the South saw a 2.2 percent
rise. In the Northeast, sales fell 1.2 percent.
The report came a day after the Federal Housing Finance Agency said US home
prices fell 0.6 percent in August versus July.
(Watch the accompanying video for more on the report...)
The
drop, however, was slightly less than the 0.8 percent fall in July,
which is perhaps a glimmer of hope for the hard-hit U.S. housing market
as it may indicate that the precipitous drop in home prices could be
abating.
A huge supply of unsold homes, tighter lending standards and record
foreclosures have pushed down home prices.
For
the 12 months ending in August, U.S. home prices fell 5.9 percent, and
the cumulative decline since the April 2007 peak is 6.5 percent,
according to the Federal Housing Finance Agency's House Price Index.
Copyright 2008 Reuters. Click for restrictions.
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