Home Sales Fall to 10-Year Low; Prices Tumble
Existing home sales in America fell to a 10-year low in the second quarter and the median price for a single-family house dropped 7.6% as the real estate recession deepened.
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A sign is posted in front of a bank owned home that is for sale August 14, 2008 in Richmond, California. According to a report by RealtyTrac, home foreclosure filings surged 55 percent in July compared to a year ago as borrowers continue to default on home loans.
The median price tumbled to $206,500 from $223,500 a year earlier, the Chicago-based National Association of Realtors said yesterday. Sales of single-family houses and condominiums fell 16% to 4.913 million at an annualized pace. Prices are declining with America on the brink of a recession, consumer prices rising, and 30-year fixed mortgage rates at a six year high last month. A third of all sales in the quarter were foreclosures or "short sales," in which lenders take a loss on a property, the Realtors said. Bank repossessions almost tripled in July from a year earlier, RealtyTrac Inc., a seller of foreclosure data, said in a separate report yesterday.
"It's getting worse," RealtyTrac's executive vice president for marketing, Rick Sharga, said in an interview. "The number of properties that have been foreclosed on by the banks and still haven't sold is the highest we've ever seen."
American economic growth slowed to 1.8% in the second quarter as unemployment rose. Forecasters say home values will drop more. The S&P/Case Shiller home price index that tracks 20 cities may tumble as much as 12% this year, McLean, Va.-based Freddie Mac, the no. 2 mortgage buyer, said in an August 11 report.
