Existing home sales decline more than forecast in April

WASHINGTON -- Sales of existing homes fell more than expected in April while prices slid for a record ninth consecutive month, indicating further troubles ahead for the housing market.

The National Association of Realtors reported yesterday that sales of existing homes dropped 2.6 percent last month to a seasonally adjusted annual rate of 5.99 million units, the slowest sales pace in nearly four years.

The median price of a home fell to $220,900, a 0.8 percent decline from the median price a year ago. The median is the point where half the homes sold for more and half for less.

The slide in existing home sales came after a report Thursday that showed a big 16.2 percent surge in sales of new homes in April that occurred as the median price of a new home fell by a record 11.1 percent from the previous month.

Analysts said the disparity in sales of new and existing homes for April reflected in part the decision by builders to aggressively cut prices to unload inventory while homeowners are still reluctant to lower their asking prices.

"It is only a matter of time before homeowners realize that the dream is over and that price cuts are now necessary to sell their homes," said Peter Schiff, president of Euro Pacific Capital, a Darien, Conn., investment firm.

The supply of existing homes for sale shot up to a record total of 4.2 million in April, an increase of 394,000 from the March supply.

Analysts predicted that this big inventory surge would act to further depress prices.

"We're swimming in supply," said Mike Larson, a real estate analyst with Weiss Research, who cited a number of factors for the unsold homes.