U.S. Existing Home Sales Fell in March; Prices Lower

[Purveyor]

Source: Bloomberg News

April 22 (Bloomberg) -- Sales of previously owned homes in the U.S. fell in March as loan restrictions and the prospect of further price declines kept buyers away.

Purchases dropped 2 percent, less than forecast, to an annual rate of 4.93 million, from 5.03 million in February, the National Association of Realtors said today in Washington. The median sales price fell 7.7 percent from a year earlier.

Defaults on subprime mortgage loans have led banks to tighten borrowing rules, while home values are decreasing as foreclosures add to the glut of unsold properties. The housing slump, now in its third year, is one reason some Federal Reserve policy makers are concerned the U.S. is heading into a recession.

``There still is an imbalance in the existing housing market that needs to be corrected through lower inventories and higher sales,'' said Michelle Meyer, an economist at Lehman Brothers Holdings Inc. in New York, which correctly forecast the sales level. ``The market will remain out of balance this year and most of next. As long as the housing market remains weak we think the economy will remain weak as well.''

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The number of homes for sale at the end of March increased by 40,000 to 4.06 million. At the current sales pace, that represented 9.9 months' worth, up from 9.6 months' worth at the end of the prior month.

The median price of an existing home dropped to $200,700 from $217,400 a year earlier. A report today from the government's Office of Federal Housing Enterprise Oversight showed February home prices were down 2.4 percent from a year earlier.



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