Sales of existing homes fell for the fifth consecutive month in the United States in August as the once-booming housing market slowed further.
The National Association of Realtors reported today that existing home sales slipped by 0.5 per cent to a seasonally adjusted annual rate of 6.30 million units.
The slowdown in sales was weighing on home prices, with the median price of an existing home sold in August dropping to $225,000, 1.7 per cent below August 2005. It marked the first year-over-year price decline in more than 11 years.
The weakness in existing home sales followed a report last week that construction of new homes and apartments plunged by 6 per cent in August, pushing building activity to the lowest level since early 2003.
The housing sector, which had enjoyed five boom years of record sales, has been slowing sharply this year under the impact of rising mortgage rates and a slowing economy.
David Lereah, the Realtors' chief economist, said the drop in prices had been expected, indicating that sellers are finally starting to lower their asking prices in the face of weaker sales and soaring inventories.
The inventory of unsold homes rose 1.5 per cent to an all-time high of 3.92 million units. At the August sales pace, it would take 7.5 months to sell the backlog of unsold homes, representing the longest period since April 1993.