Housing not recovering anytime soon.

Home Resales, Prices Decline

By JEFF BATER
February 25, 2008 12:29 p.m.

WASHINGTON -- Existing-home sales fell for the sixth month in a row during January as consumers stood on the sidelines watching prices slide for property.

Home resales fell to a 4.89 million annual rate, a 0.4% decrease from December's revised 4.91 million annual pace, the National Association of Realtors said Monday. Originally, the NAR estimated sales at 4.89 million in December.

The median home price was $201,100 in January, down 4.6% from $210,900 in January 2007. The median price in December was $207,000. Falling prices have kept would-be buyers from signing off on property as they wait in hope for still-lower price tags.

"Inventories are high, so it's not surprising prices are declining," NAR economist Lawrence Yun said.

Lenders have tightened their standards on home loans, contributing to the credit crunch that is restraining the U.S. economy. Those tighter standards have priced marginal buyers out of the market and made purchasing more difficult and costly for prime borrowers.

"Subprime loan and other risky mortgage products have virtually disappeared from the marketplace, and over the past five months, this has been reflected in soft but fairly stable home sales," Mr. Yun said.

The January resales level was above Wall Street expectations of a 4.81 million sales rate for previously owned homes.

The average 30-year mortgage rate was 5.76% in January, down from 6.10% in December, according to Freddie Mac.

Inventories of homes increased 5.5% at the end of January to 4.19 million available for sale, which represented a 10.3-month supply at the current sales pace. There was a 9.7-month supply at the end of December, revised from a previously estimated 9.6 months.

Regionally, existing-home sales in January were mixed. Sales fell 3.6% in the Northeast, 2.1% in the West, and 0.5% in the South. Demand rose 3.4% in the Midwest.