Latest Updates on Property News

Nov 29, 2007
US existing home sales fall to 8-year low

WASHINGTON – SALES of previously owned United States homes fell last
month to the lowest level in at least eight years as loan
restrictions and the prospect of further price declines deterred
buyers.

Purchases dropped 1.2 per cent, more than forecast, to an annual
rate of 4.97 million, the lowest since record keeping began in 1999,
from a 5.03 million September pace, the National Association of
Realtors said.

Sales were down 20.7 per cent from October last year and the median
home price fell by the most on record.

Defaults on US sub-prime mortgages have prompted banks to tighten
lending standards, while foreclosures add to a glut of unsold
properties that is putting pressure on home prices.

Lower property values raise the risk that consumers will curtail
spending, making firms more cautious about investing and compounding
a slowdown in economic growth, economists said.

‘Credit conditions seem to be getting tighter again, the economy is
likely to slow and falling prices may be causing people to wait
before buying,’ Mr David Sloan, a senior economist at 4Cast Inc in
New York, said before the figures were released. ‘There is plenty of
downside left in this market.’

A government report showed last month’s orders for US durable goods
fell more than forecast, signalling that businesses are losing
confidence the economic expansion will be sustained.

Home resales were forecast to fall 0.8 per cent to an annual rate of
5 million from a previously reported 5.04 million pace in September,
according to the median estimate of 70 economists in a Bloomberg
News survey.

The median price dropped 5.1 per cent to US$207,800 (S$299,900), the
biggest drop on record, compared with October last year.

The number of homes for sale at the end of the month rose 1.9 per
cent to 4.45 million.

At the current sales pace, that represented 10.8 months’ supply,
compared with 10.4 months in September. ‘If sales were to continue
to decline at this rate, it would be a big concern, but we don’t
expect major declines going forward,’ said Mr Lawrence Yun, the
chief economist at the real estate agents’ group.

After half an hour of trading, the Dow Jones Industrial Average rose
163.48 points to 13,121.92 as investors snapped up shares in banks
which they saw as being oversold.