Friday, September 25, 2009

Surprise fall in US home sales

WASHINGTON: Sales of existing US homes unexpectedly fell last month for the first time in four months, signalling the housing recovery will be slow to gain speed.

Purchases dropped 2.7 per cent to a 5.1 million annual rate, the second-highest level in the last 23 months, the National Association of Realtors said yesterday. The median price dropped 12.5 per cent from August last year.

Job losses indicate more Americans may lose their homes, swelling the glut of unsold properties. Even so, the housing recession that crippled the economy is easing as foreclosure-driven price declines, tax credits to first-time buyers and near record-low borrowing costs have helped stabilise demand in recent months.

'The improvement in the housing market is not going to be a smooth rise but a choppy, upward trend,' said Mr Zach Pandl, an economist at Nomura Securities International in New York, who projected sales would fall.

'The real test will be if the market can weather the end of government stimulus.'

Existing home sales were forecast to rise to a 5.35 million annual rate, according to the median forecast of 74 economists in a Bloomberg News survey.

Sales had reached a 4.49 million pace in January, their lowest level since comparable records began in 1999.

Another report showed the number of Americans seeking unemployment benefits dropped last week to its lowest level in two months, signalling the labour market is on the mend. Jobless claims fell to 530,000 from 551,000 the prior week, according to the Labour Department.

Purchases of existing homes were up 3.4 per cent compared with a year earlier. The median price fell to US$177,700 (S$251,600) from US$203,200 a year ago. The number of unsold homes dropped 11 per cent to 3.6 million last month.


Source: Straits Times, 25 Sep 2009

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