Also, oil is down another $5 a barrel today.
Home sales gain biggest since July 2003
Fri Oct 24, 2008 10:57am EDT
By Patrick Rucker
WASHINGTON (Reuters) – Sales of previously owned U.S. homes rose 5.5 percent last month, the biggest gain since July 2003, and the inventory of unsold homes fell, a hopeful sign for a housing market mired in a long slump.
The National Association of Realtors said on Friday that sales of existing homes rose to a 5.18 million-unit annual rate from the 4.91 million unit pace set in August. Economists had expected sales to rise to only a 4.93 million unit rate.
It was the first time the sales pace had risen above its year ago level in three years, a sign the market could be stabilizing.
The surprisingly large jump in sales pushed the inventory of unsold homes down by 1.6 percent to 4.27 million, or a 9.9 months’ supply at the current pace. While the inventory is still uncomfortably high, the decline is welcome news for a housing market mired in a deep slump.
Home prices, however, showed no signs of escaping their long, deep slide. The median national home price declined 9 percent from a year ago to $191,600, the lowest level since April 2004, the industry trade group said.
The increase in sales was spurred by a rise in foreclosure and other ‘distress sales’ in regions of the country hard-hit by the ongoing housing downturn, said the Realtors’ chief economist, Lawrence Yun.
“n some regions, the lower prices are seeing buyers return to the marketplace,” The said. “his was a nice jump and hopefully this trend can continue because the first step to stabilizing the market is an increase in home sales.”
Sales rose in three regions, with the West recording a 16.8 percent jump. The Midwest saw an increase of 4.4 percent and the South saw a 2.2 percent rise. In the Northeast, sales fell 1.2 percent.
(Editing by Andrea Ricci