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Existing home sales creep up 0.4%

Existing home sales fell 2 percent in the South and 3.3 percent in the Northeast in November from October. They were flat in the Midwest, but jumped 10.3 percent in the West. Existing home sales fell 2 percent in the South and 3.3 percent in the Northeast in November from October. They were flat in the Midwest, but jumped 10.3 percent in the West. (David Zalubowski/associated Press)
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Associated Press / January 1, 2008

WASHINGTON - Sales of previously owned homes nudged up in November, but that didn't improve the broader picture of a feeble housing market racked by record-high foreclosures and harder-to-get credit.

The National Association of Realtors reported yesterday that sales of existing single-family homes, condominiums, and townhouses rose 0.4 percent in November from October, to a seasonally adjusted annual rate of 5 million units. Even with the small increase, the pace of sales was still the second-lowest on record going back to 1999. The lowest pace - 4.98 million - was registered in October.

"There's little reason to pop open any champagne corks," said Michael Larson, a real estate analyst at Weiss Research Inc.

Sales are down 20 percent from November 2006, underscoring the problems plaguing the housing sector.

Economists were calling for sales to either move up slightly or hold steady for November.

Home prices continued to sink.

The median price of a home sold last month was $210,200. That marked a 3.3 percent drop from a year ago. It was the fifth-biggest annual decline on record. The median price is where half sell for more and half sell for less.

By region of the country, sales were mixed.

Existing home sales jumped 10.3 percent in November from October in the West. They were flat in the Midwest. However, they fell 2 percent in the South and 3.3 percent in the Northeast.

The inventory of unsold homes in November was 4.27 million homes. At the current sales pace it would take 10.3 months to exhaust that overhang.

"Inventory is still high and further reduction in prices may be required in some areas to induce buyers back into the market," said the association's chief economist, Lawrence Yun.

A dip in 30-year mortgage rates in November probably helped give nationwide existing-home sales the small boost last month, the association suggested. Yun thought the small increase could be taken as a sign that the market might be stabilizing.

A credit crunch, which took a turn for the worse in the summer, has made it more difficult for people to secure financing to buy a home.

The housing market has been suffering through a severe slump following five years of record-breaking activity from 2001 through 2005. Sales turned weak as did home prices.

The housing and mortgage meltdowns have raised the odds that the country will fall into a recession. And, the situation has given Democrats and Republicans - including those who want to be the next president - plenty of opportunities to spread blame around.

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