Foreclosure Business: US Housing Sales Hit A New Low

David Sloan, an economist with 4cast Ltd. says, “It is clearly well below expectations and it is also interesting that prices have declined sharply on a month-to-month and year-on-year basis.”

It was really important to find out whether there would be acceleration or moderation in the pace of this decline. We could only know that when we saw how foreclosures were rising and how September saw a sharp turn towards trouble when the prices tumbled and sales of previously owned homes fell to a record low.

According to the National Association of Realtors it was really unfortunate to find out that there was a 8 percent dip of existing homes bringing the figure to 5.04 million unit in September which was lowest on record since 1999.

“The question was, is the housing decline going to continue at this pace and foreclosures continue to rise or even moderate or accelerate? This suggests that the decline housing is accelerating, foreclosure numbers are rising and that the downside risk is certainly significant.”

There was a drop in the national median price for both existing single-family homes and condos of 4.2 per cent from a year ago to $US211,700 ($234,000) which was down 5.7 per cent from August.

The data has pushed the US stock prices and the dollar to session lows.

Although mortgage availability has improved in recent weeks, Lawrence Yun, an economist for NAR says, “Mortgage problems were peaking back in August when many of the September foreclosed homes were being negotiated, and that slowed sales notably in higher-priced areas that rely more on jumbo loans.”

We have come to see that the prices for US Government bonds rose as traders bet the dismal figures made further interest rate cuts from the Federal Reserve more likely.

The realty trade group pinned September’s sales weakness on a tightening of credit in August, which was sparked by concerns over rising foreclosures on U.S. subprime mortgages extended to borrowers with spotty borrowing histories.

There was a marked slowness of pace of existing homes sales, both single-family homes and condominiums. This helped to drive up the inventory of unsold homes on the market by 0.4 per cent to 4.4 million last month.

That marks a 10.5-month supply at the September sales pace, the highest since NAR data began combining sales of single-family homes and condos in 1999.

There was a fall in the sales of Single-family home by 8.6 per cent in September to a 4.38 million-unit annual pace, close to a 10-year low, from 4.79 million in August. The association said that the sales were down in all regions.

There was a marginal edging up of mortgages last week even as interest rates sank to their lowest levels since May as shown by a separate report on Wednesday.

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