US Home Resales Drop, Inventories Rise to Record as Housing Woes Persist

[marmar]

from Bloomberg:



U.S. Economy: Home Resales Decline, Inventories Jump (Update3)

By Shobhana Chandra

May 23 (Bloomberg) -- Sales of previously owned homes in the U.S. fell in April and the supply of unsold properties reached a record, signaling no let-up in the 27-month housing slump.

Purchases declined 1 percent to an annual rate of 4.89 million, higher than forecast, the National Association of Realtors said today in Washington. The median price fell 8 percent from April last year, the second-biggest drop.

``There is no indication that things are improving,'' said Christopher Low, chief economist at FTN Financial in New York, who forecast sales would drop to a 4.9 million pace. ``Inventories will stay out of balance at least until the end of 2009 and prices will keep falling.''

Defaults on subprime mortgages have prompted lenders to restrict credit, while falling property values have given buyers who are still able to get financing reason to delay purchases. The slide in home values may hurt consumer spending, which accounts for more than two-thirds of the economy.

Treasury securities, which had risen before the report, stayed higher. Benchmark 10-year note yields fell to 3.84 percent at 4:20 p.m. in New York, from 3.92 percent late yesterday. The Standard & Poor's 500 stock index slid 1.2 percent to 1,375.93.

Resales were forecast to fall 1.6 percent to a 4.85 million annual rate, according to the median forecast of 67 economists in a Bloomberg News survey.

Sales were down 18 percent compared with April 2007.

Glut of Homes

The number of previously owned unsold homes on the market at the end of April jumped to 4.55 million from 4.12 million in March. The total represented 11.2 months' supply at the current sales pace, the highest on record and up from 10 months at the end of the prior month.

The median price of an existing home fell to $202,300 from $219,900 in April 2007. ......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=a3vMYaNBGrfM&refer=home

[Hydra]

1. Swirling the drain

Anyone see Bush doing anything to help? Didn't think so.