US home sales much worse than expected
By James Politi in Washington
Published: September 24 2008 17:09 | Last updated: September 24 2008 17:09
New data on Wednesday showed that existing home sales dropped by 2.2 per cent in August, which was much worse than expected and highlighted the continuing downturn in the US housing market.
The median existing home price fell 9.5 per cent to $203,100, the sharpest drop on record.
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The volume of sales was more or less in line with levels of sales seen since last autumn.
Meanwhile, the inventories of previously owned homes for sale fell 7 per cent to a supply of 10.4 months – its lowest level since March. A significant further drop supply of existing and new homes on sale is viewed as necessary for the recovery of the housing market.
However ,many of the sales at the moment are of properties that have been foreclosed on or being sold by homeowners whose properties have fallen below the value of their mortgages.
“There has been no meaningful change in the level of activity since late last fall,” said Ian Shepherdson of High Frequency Economics.“The NAR estimates that 35 per cent to 40 per cent of all sales are of distressed property, so underlying private activity is weaker than the headlines and there is little sign of imminent improvement.”
Copyright The Financial Times Limited 2008
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