Home Sales Drop to 10-Year Low in US

Previously owned home sales in the US fell 5.3 percent in January after showing an increase in December, according to the National Association of Realtors. Existing home sales, which are the largest part of all home sales in the country, fell to an annualized rate of 4.49 million in January. That is the slowest pace in over a decade, and 8.6 percent lower than January, 2008.

 

The median home price also fell, to $170,300. That is the lowest it has been since March of 2003 and also down nearly 26 percent its high in July, 2006 when it was $230,100. Earlier in the week, the S&P/Case-Shiller index reported an 18.5 percent drop in home prices in 20 major US cities from a year earlier, the largest drop in that index’ history.

 

Potential buyers are looking, according to the NAR’s chief economist, Lawrence Yun, but they aren’t buying as they expect prices to fall even further. “Some are just making a rational calculation to say, ‘I have the capacity to enter now, but I don’t want to do so.’”

 

The NAR estimated that foreclosures and distressed sales made up some 45 percent of all sales in January. The best results were in the West of the country, where sales were unchanged in January. One reason for that is the very high number of foreclosures in California and other boom states, where homes are now going for much less than they were only a few years ago. Both the Midwest and South saw a drop of 5.7 percent, and the Northeast saw a fall of 14.7 percent.

 

Useful Resources