Existing Home Sales Down

Existing Home Sales Down

The National Association of Realtors announced recently that total existing home sales – including single-family homes, townhomes, condominiums and co-ops – decreased 1.2 percent in October when compared to the previous month’s sales.

October marked the eighth straight month that the pace of sales has declined from the month before, and it left sales down 20.7 percent from a year ago.  It was also worse than the consensus estimate of economists surveyed by Briefing.com who had forecast an annual rate of 5 million.

The sales pace for October was well short of economists’ forecasts.  The Census Bureau’s latest report also sharply cut back on its earlier estimates for sales in August and September, when a meltdown in mortgage markets kept many potential buyers from getting the financing they needed.

Also depressing sales and prices was a record 191,000 completed new homes on the market that have not yet been sold.

Despite a record drop in home prices and low interest rates, it appears that potential home buyers caught in the current credit squeeze continue to stay on the sidelines.

The global credit crunch and growing fears that the US economy is headed toward recession has resulted in a return to historically low long-term mortgage rates.  Lower interest rates naturally make housing more affordable for those seeking to buy or refinance a home.  The huge inventory of homes for sale is a problem for home sellers, but buyers are finding the combination of falling home prices and historically low rates to be a powerful combination.