U.S. home sales hit 4-year low

07/25/2007

By Jesus Sanchez,
LA Times Staff Writer
July 25, 2007


The pace of nationwide existing-home sales sank in June to the lowest in level in more than four years, as many buyers remained on the sidelines and the housing market indicated it remained far from staging a turnaround.

Sales of existing homes and condominiums dropped a larger-than-expected 3.8% from May, to a seasonally adjusted annual rate of 5.75 million properties, the National Assn. of Realtors said today. June's pace was the lowest in more than four years and was down 11.4% compared with the same month last year.

The NAR noted some promising signs, however, including a minor decline in the inventory of unsold homes and the first year-over-year gain in median sales price in 11 months. The national median sales price for existing homes in June was $230,100, up 0.3% from the same period last year.

But buyers remained cautious and most economists remained gloomy about housing in light of the bust in the sub-prime mortgage market and skyrocketing foreclosure activity. On Tuesday, the head of the nation's largest mortgage lender, Calabasas-based Countrywide Financial, said he did not expect a recovery until 2009.

"Home buyers have been getting mixed signals about the housing market, which is causing some of them to hesitate," Lawrence Yun, NAR senior economist, said in a statement. "Although general buying conditions remain favorable for long-term home buyers, it appears some buyers are looking for more signs of stability before they have enough confidence to make an offer."

Ian Shepherdson, an economist for the consulting firm High Frequency Economics, was more blunt about the June sales results: "This is just horrible.

"Housing is contracting at an accelerating pace, taking out with a vengeance the brief stabilization at the turn of the year, when mild weather and plunging gas prices supported activity," Shepherdson said in a research note.

Regionally, the West reported a 6.8% drop in existing-home sales in June. Sales dropped 1.7% in the South, 2.8% in the Midwest and 7.3% in the East.