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U.S. existing home sales slump 5.3% in January
Last Updated(Beijing Time):2009-02-26 11:51
Sales of existing homes in the United States dropped by 5.3 percent in January to the lowest level in nearly 12 years, the National Association of Realtors (NAR) reported on Wednesday.

Existing-home sales, including single-family, town homes, condominiums and co-ops, fell to a seasonally adjusted annual rate of 4.49 million units in January from a level of 4.74 million units in December, and were 8.6 percent lower than the 4.91 million-unit pace in January 2008.

A high prevalence of distressed home sales, and of those in lower price ranges, has skewed the median price to be markedly lower than under normal market conditions.

The national median existing-home price for all housing types was 170,300 dollars in January, down 14.8 percent from a year earlier when the median was 199,800 dollars.

The median is where half of the homes sold for more and half sold for less.

Regionally, existing-home sales in the Northeast dropped 14.7 percent to an annual pace of 640,000 in January, and are 23.8 percent lower than January 2008. The median price in the Northeast was 228,200 dollars, down 14.7 percent from a year ago.

Existing-home sales in the Midwest fell 5.7 percent in January to a level of 1.00 million and were 16.7 percent below a year ago. The median price in the Midwest was 138,100 dollars, 6.8 percent lower than January 2008.

In the South, existing-home sales declined 5.7 percent to an annual pace of 1.64 million in January, 15.9 percent below January2008. The median price in the South was 152,100 dollars, down 7.4 percent from a year earlier.

Existing-home sales in the West remained unchanged at an annual rate of 1.20 million in January and were 29.0 percent stronger than a year ago. The median price in the West was 220,000 dollars,25.5 percent below January 2008.

Lawrence Yun, NAR chief economist, said there was understandable hesitation by some home buyers.

"Given so much stimulus package discussion in January, some would-be buyers simply sat out for clarity and certainty on the nature of housing stimulus," he said.

"The housing market will soon get a lift from very favorable buying conditions -- not only from improved affordability, but also from the stimulus of an 8,000-dollar first-time home buyer tax credit, and higher conforming loan limits that will allow more people to tap into 50-year low mortgage rates," he added.

NAR estimates the impact of the stimulus package and lower interest rates on the housing market to be about 900,000 additional home sales in 2009 compared to conditions before the stimulus package.

Inventory is expected to fall below an 8-month supply by the yearend, which would be consistent with home price stabilization.

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