Saturday, October 20, 2012

US existing home sales slip in September

WASHINGTON: Sales of existing homes in the United States slipped in September after hitting their fastest pace in more than two years in August, an industry group said on Friday.

Existing home sales fell 1.7 percent last month from August to an annual rate of 4.75 million, the National Association of Realtors (NAR) said.

But the September number was still 11.0 percent higher than the sales rate a year earlier, a further sign of recovery under way in the depressed housing market.

Inventory continued to tighten and the national median home price rose for a seventh straight month - September's figure of $183,900 was up 11.3 percent from a year earlier.

"Despite occasional month-to-month setbacks, we're experiencing a genuine recovery," said Lawrence Yun, NAR chief economist.

"More people are attempting to buy homes than are able to qualify for mortgages, and recent price increases are not deterring buyer interest. Rather, inventory shortages are limiting sales, notably in parts of the West."

Despite record-low mortgage interest rates, spurred by the Federal Reserve's loose monetary policy, many buyers are having a hard time getting home loans amid tightened standards.

The inventory of homes in the market fell by 3.3 percent to a 5.9-month supply.

Celia Chen at Moody's Analytics said sales are still running at their strongest pace since mid-2010 and other indicators in the report are consistent with a slow recovery in housing.

"This long-awaited recovery will help support the flagging economic expansion," she said.

Lindsey Piegza, an analyst at FTN Financial, said that while the housing market remains far from robust compared with long-term trends, even excluding the bubble, it is moving clearly in the right direction.

"Its progress remains a large part of the boost in consumer confidence that is less sensitive now to the still ragged labour market," she said.

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