- The Washington Times - Thursday, July 26, 2007

ASSOCIATED PRESS

Sales of existing homes fell in June for a fourth consecutive month, further evidence that housing troubles are far from over.

The National Association of Realtors reported yesterday that sales of existing homes dropped by 3.8 percent in June to a seasonally adjusted annual rate of 5.75 million units. That is the slowest sales pace since November 2002, and the decline was about twice what had been expected.

The median price of an existing home edged up to $230,100, 0.3 percent more than a year ago. The median is the point where half the homes sold for more and half for less.

It was the first price gain in 11 months. Analysts, however, said they were looking for prices to fall further because of the large number of unsold homes.

For June, the median price of a single-family home rose by 0.1 percent and the price of a condominium increased by 2.6 percent when compared with a year ago.

“With inventories still way out of line, unless prices fall a lot more, the housing market will not turn around any time soon,” said Joel Naroff, chief economist at Naroff Economic Advisors.

Fed Chairman Ben S. Bernanke told Congress last week that he expected housing to be a less severe drag on growth in the coming months. Many private economists are not as optimistic. They note that existing-home sales fell at an annual rate of 28 percent from April through June, the steepest in the downturn.

“Housing is contracting at an accelerating pace, taking out with a vengeance the brief stabilization at the turn of the year,” said Ian Shepherdson, chief economist at High Frequency Economics, a private forecasting firm.

The housing slump follows five boom years when sales of new and existing homes set records and home prices soared at double-digit rates. Since late 2005, sales have slumped as mortgage rates rose and prospective buyers balked at selling prices.

Those problems have worsened in recent months because of troubles in the subprime mortgage market, which offered loans to buyers with spotty credit histories. Rising mortgage defaults are dumping more homes onto an oversupplied market.

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