HOME PRICES DROP FOR 5TH STRAIGHT MONTH

More negative news from the housing market came out today in the home sales and prices report issued by the National Association of Realtors this morning.

From Reuters via USA Today:

The pace of existing home sales fell in January to a 4.89 million unit annual rate, lowest level in nearly a decade, while prices slid and inventories swelled, the National Association of Realtors said Monday.

The median price of a single-family home — half sold for more, half for less — slid below $200,000 to $198,700 the report says.

The inventory of homes for sale rose 5.5% to 4.19 million units at the end of January, which represents about 10.3 months' supply at the current sales pace. The national median home price fell 4.6% from a year ago to $201,100.

The drop in sales and the fifth straight decline in prices underscored the continued pressure facing housing, which is struggling to emerge from its worst slump in a quarter-century.

UCLA ANDERSON FORECAST PREDICTS ECONOMIC SLOWDOWN

From AP via MSNBC:

Ongoing weakness in the housing market will push the national economy to the brink of recession, but growth in other areas should put the country back on a slow road to recovery by 2009, according to an economic forecast released Wednesday.

The quarterly Anderson Forecast by the University of California at Los Angeles predicts growth in the gross domestic product of just over 1 percent for the fourth quarter of 2007 and first quarter of 2008.

Economic growth will remain “tepid” for the remainder of 2008 and return to 3 percent in 2009, said David Shulman, senior economist for the forecast.

Shulman lowered his forecast for housing starts to an annual rate of about 1 million to 1.1 million, down from a range of 1.2 million to 1.3 million.

That outlook is less optimistic than one presented Tuesday by the National Association of Realtors, which projected construction of new homes will fall to 1.4 million this year from 1.8 million last year.

Shulman also expects housing prices to plunge 10 percent to 15 percent before they start to recover, sometime in 2009.

PENDING EXISTING HOME SALES LOWEST SINCE 2001

From USA Today:

Pending sales of existing homes, a leading indicator for the housing sector, fell in July to the lowest level in nearly six years as borrowers struggled to finalize home purchases, particularly in expensive areas.

The National Association of Realtors said its seasonally adjusted index of pending home sales for July fell 16.1% from a year ago and 12.2% from the prior month.

A home sale is listed as pending when the contract has been signed but the transaction has not closed. The sale usually closes within months of signing.

Some home purchases aren't closing because mortgage loans have been "falling through at the last moment," Lawrence Yun, the Realtors trade group's senior economist, said in a statement.

"Numbers like this should put to rest the belief that we've reached the bottom" in the housing market, said Joel Naroff, chief economist for Commerce Bancorp. "There's still a lot of pain that's ahead of us."

MORE BAD NEWS FOR HOUSING MARKET

From USA Today:

Sales of existing homes dropped for a fifth straight month in July, falling to the slowest annual pace in nearly five years, while home prices fell for a record 12th consecutive month.

The National Association of Realtors reported that sales of existing homes dipped 0.2% last month to a seasonally adjusted annual rate of 5.75 million units.

The median price of a home sold last month slid to $230,200, down 0.6% from the median price a year ago. It marked the 12th consecutive month that home prices have declined compared with a year ago, an all-time high.

The inventory of homes for sale rose 5.1% to 4.59 million, representing 9.6 months worth of supply at the current sales pace.

MIXED RESULTS FOR EXISTING HOME SALES

The National Association of Realtors by 0.5% in October, the first increase since February, as buyers were lured by falling prices, the third consecutive monthly price drop. The median price for all existing homes fell 3.5% when compared to October of 2005, the largest decrease since the NAR began keeping records in 1968. This is also the first time that existing prices have fallen for three consecutive months.

Prices in the South fell the furthest, dipping 7%. Florida caused a huge drag on the region with a whopping 22% decrease in prices from October 2005.

USA Today
Reuters
WSJ.com
Forbes