January Existing Home Sales Fall By 5.3%

[briann]

http://www.foxbusiness.com/story/markets/industries/real-estate/january-existing-home-sales-fall/

Sales of existing homes saw continuing declines in the month of January, an industry trade group said Wednesday, as the struggling housing market remained sluggish in the wake of this troubled U.S. economy and financial system.

The National Association of Realtors said sales of existing homes, the biggest component of the housing market, slowed by 5.3% in January to an annual pace of 4.49 million units.

That decline was much sharper than what economists were looking for. They had anticipated that housing sales would remain flat at 4.79 million units, according to data provided by Thomson Reuters. From a year ago, the pace of home sales has fallen 8.6% and is now down more than 38% from its Fall 2005 peak.

The inventory of unsold homes rose to 9.6 months.

According to the industry trade group, the average price for a sold single-family home in January was $169,900, down 13.8% from a year ago.

Lawrence Yun, the trade organization’s chief economist, said the drop in home prices was primarily because Washington’s stimulus bill was still under deliberation and buyers wanted to wait it out.

“Given so much stimulus package discussion in January, some would-be buyers simply sat out for clarity and certainty on the nature of the housing stimulus” bill, he said in a statement.

NAR estimates that the stimulus package will equate to approximately 900,000 additional home sales in 2009.

According to the industry trade group, that a large proportion of existing home sales during the month were considered “distressed sales,” a term to describe the buying of foreclosed homes. According to NAR, the national median price of homes sold fell by 14.8% from a year ago to $170,300 because of the distressed sales.

For the specific regions tracked by NAR, existing home sales fell 14.7% in the Northeast with the average sales price falling 14.7% to $228,200. In the Midwest, sales fell 5.7% with the average sales price slipping 6.8% to $138,100. The South saw sales fall 5.7% and home sales fell 7.4% to $152,100.

The West, which has been the most troubling region for the housing market, had sales mostly flat in January. However, the average sales price of a home in the West has fallen 25.5% from a year ago.