National Home Sales, Prices Continue Decline

10 07 2008

New numbers from the National Association of Realtors show that the housing market is not out of the woods yet.

The association’s Pending Home Sales Index fell to 84.7 in May, down 4.7 percent from an upwardly revised reading of 88.9 in April. The index is 14 percent below its level in May 2007.

The recent decline is steeper than the 2.8 percent fall that economists had forecast, according to a consensus of estimates compiled by Briefing.com.

The index had jumped more than 7 percent in April as falling home prices sparked a bout of bargain hunting. But May’s reading proved the housing slump is far from over.

In the report, the association lowered its existing-home sales outlook for 2008, saying it now expects sales of 5.31 million, down from the 5.39 million forecast in April.

The association says existing home prices also are expected to fall. The aggregate median existing-home price is projected to fall 6.2 percent this year to $205,300, and then rise by 4.3 percent in 2009 to $214,100, the report indicated.

Pending home sales declined in all regions, but the drop was relatively mild in the West, where sales fell just 1.3 percent. Pending home sales were down 2.9 percent in the Northeast, 6 percent in the Midwest and 7.1 percent in the South.

The index is based on a national sample, typically representing about 20 percent of transactions for existing-home sales. A reading of 100 is equal to the average level of activity during 2001, the first year to be examined as well as the first of five consecutive record years for existing-home sales.

Source: National Association of Realtors


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