WASHINGTON – The pace of existing home sales nationwide last month fell to a seasonally adjusted rate of 5.04 million units per year, the slowest rate since recordkeeping began in 1999, according to a report today by the National Association of Realtors. The September resale rate was 8.0 percent below August’s revised pace of 5.48 million per year, the NAR said.
The decline was almost twice as sharp as expected, based on a Bloomberg News survey of 76 economists, whose median prediction was that home resales would fall 4.5 percent in September from the originally reported August pace of 5.5 million homes per year.
The decline was led by an 8.6-percent plunge in resales of single-family homes, which fell to their lowest level since January 1998, while condominium and co-op resales fell 4.3 percent. Analysts cited the credit-market turmoil that made it more difficult for buyers to find mortgages.
The median price of homes sold last month was $211,700, a decline of 5.4 percent from August and 4.2 percent from September 2006.
The number of homes for sale at the end of the month rose to 4.4 million. At the current rate of sales, that was a 10.5-month supply, the highest since record-keeping began and a 9.4-percent increase from August’s 9.6-month supply.
Sales fell in all four regions, led by a 10.0-percent decline in the Northeast.
“The worst isn’t behind us, the worst is here right now,” Jonathan Basile, an economist at Credit Suisse Holdings in New York, told Bloomberg News. “Housing is going to be a significant drag on the third quarter and fourth quarter.”
Meanwhile, home-loan applications last week were little changed from the week before, according to a separate report today from the Mortgage Bankers Association.
The MBA’s overall mortgage applications index edged up to 656.5 in the week ended Oct. 19 from 656.3 the week before, as its index of home-purchase applications fell 3.1 percent to 415.9 while its refinancing application index rose 4.0 percent to 2,059.3, its highest level since May.
The trade group credited lower interest rates on fixed-rate mortgages with helping to boost refinancing applications. But buyers continued to face tightened qualification requirements as a result of the subprime lending slump.
The MBA index counts all mortgage applications, including those that are rejected. Some analysts contend it therefore may provide an over-optimistic view of the current sales climate. “We think there are buyers out there probably putting out more mortgage applications than normal,” in hopes of improving their odds of receiving an approval, Adam York, an economist at Wachovia Corp. in Charlotte, N.C., told Bloomberg News.
The National Association of Realtors is the nation’s largest trade association, with more than 1.3 million members in all aspects of residential and commercial real estate. Additional information is available at www.realtor.org.
The Mortgage Bankers Association, a trade group representing the real estate finance industry, produces the MBA Weekly Application Survey. To learn more, visit www.mortgagebankers.org.
