US housing market feels more pain, bottom not yet in sight
Thursday, 25 December 2008
WASHINGTON, Dec 24 (AFP): The US housing market, the epicenter of the global financial crisis, saw further declines last month, according to fresh data yesterday suggesting the worst may not be over for the economy.
New home sales slipped 2.9 per cent in the past month and fell 35.3 per cent from a year earlier to an annual pace of 407,000 in November. That was the lowest level since January 1991.
With the report was grim, it contained a few bright spots. The median sales price rose 2.7 per cent from the previous month to 220,400 dollars, even if that was 11 per cent lower than a year ago.
Inventories on unsold homes fell 7.0 per cent to 374,000.
That was a drop of 25 per cent from a year earlier. Sales of existing US homes slumped a further 8.6 per cent, according to a separate report from the National Association of Realtors.
Sales of homes and apartments fell to a seasonally adjusted annual rate of 4.49 million units in November from a downward revised level of 4.91 million in October.
The was 10.6 per cent below the pace in November 2007 and reflected the ongoing woes of the sector since a bubble burst around two years ago.
"The home sales market took another major negative hit in November, with sharp declines in new and existing home sales, declines which put further downward pressure on prices, and upward pressure on inventories," said Brian Bethune, economist at IHS Global Insight.
He said the situation indicates "negative business cycle momentum (that) persists for an excruciating length of time." "A large inventory overhang continues to depress prices," said Aaron Smith at Economy.com.
"Sales volumes will be supported by more distress sales and lower mortgage rates, but it is clear from this (existing home sales) report that the hurdle to recovery is high."
The NAR said the median existing home sales price was 181,300 dollars in November, down 13.2 per cent from November 2007.
"There remains a significant downward distortion in the current price from a large number of distress sales at discounted prices," the group said.
The reports coincided with another showing US economic activity contracted at a 0.5 per cent pace in the third quarter, according to government data unrevised from an estimate last month.
New home sales slipped 2.9 per cent in the past month and fell 35.3 per cent from a year earlier to an annual pace of 407,000 in November. That was the lowest level since January 1991.
With the report was grim, it contained a few bright spots. The median sales price rose 2.7 per cent from the previous month to 220,400 dollars, even if that was 11 per cent lower than a year ago.
Inventories on unsold homes fell 7.0 per cent to 374,000.
That was a drop of 25 per cent from a year earlier. Sales of existing US homes slumped a further 8.6 per cent, according to a separate report from the National Association of Realtors.
Sales of homes and apartments fell to a seasonally adjusted annual rate of 4.49 million units in November from a downward revised level of 4.91 million in October.
The was 10.6 per cent below the pace in November 2007 and reflected the ongoing woes of the sector since a bubble burst around two years ago.
"The home sales market took another major negative hit in November, with sharp declines in new and existing home sales, declines which put further downward pressure on prices, and upward pressure on inventories," said Brian Bethune, economist at IHS Global Insight.
He said the situation indicates "negative business cycle momentum (that) persists for an excruciating length of time." "A large inventory overhang continues to depress prices," said Aaron Smith at Economy.com.
"Sales volumes will be supported by more distress sales and lower mortgage rates, but it is clear from this (existing home sales) report that the hurdle to recovery is high."
The NAR said the median existing home sales price was 181,300 dollars in November, down 13.2 per cent from November 2007.
"There remains a significant downward distortion in the current price from a large number of distress sales at discounted prices," the group said.
The reports coincided with another showing US economic activity contracted at a 0.5 per cent pace in the third quarter, according to government data unrevised from an estimate last month.