U.S. existing home sales decline to the slowest pace in nearly 4 years

Sales of existing homes in the United States fell by 2.6 percent in April, leading to the slowest pace in nearly four years, the National Association of Realtors (NAR) reported on Thursday.

The 2.6 percent fall left existing home sales to a seasonally adjusted annual rate of 5.99 million units last month from a level of 6.15 million in March. Sales were 10.7 percent lower than a 6.71 million-unit pace in April 2006.

Lawrence Yun, NAR senior economist, said he was not surprised at the decline.

"We've been anticipating slower home sales because many subprime loan products are no longer available," he said. "In addition, increased scrutiny by lenders is stopping risky mortgage origination, which is good for both consumers and the lending community."

The national median existing-home price for all housing types was 220,900 dollars in April, down 0.8 percent from April 2006 when the median was 222,600 dollars.

The median is a typical market price where half of the homes sold for more and half sold for less, but there is a downward skew in the current national comparison because sales have shifted away from many high-cost areas during the last year.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.18 percent in April, up from 6.16 percent in March; the rate was 6.51 percent in April 2006.

This week, Freddie Mac reported the fixed rate jumped to 6.37 percent.

Total housing inventory rose 10.4 percent at the end of April to 4.20 million existing homes available for sale, which represents a 8.4 month supply at the current sales pace, up from a 7.4 month supply in March.

Regionally, existing home sales in the Midwest decreased by 0.7 percent in April to a level of 1.38 million units, and are 11.5 percent below a year ago. The median price in the Midwest was 166,600 dollars, which rose 1.9 percent from April 2006.

Existing home sales in the South slipped 1.2 percent to an annual sales rate of 2.38 million in April, and are 8.8 percent below April 2006. The median price in the South was 181,100 dollars, down 0.3 percent from a year ago.

Existing home sales in the West declined 1.7 percent in April to an annual pace of 1.19 million, and are 15.6 percent below a year ago. The median price in the West was 338,200 dollars, which is 2.1 percent lower than April 2006.

Existing home sales in the Northeast fell 8.8 percent to a level of 1.04 million in April, and are 8.8 percent lower than April 2006. The median existing-home price in the Northeast was 283,600 dollars, which is 0.6 percent below a year ago.

Source: Xinhua