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August 27, 2007
Home Sales Hit 5-Year Low
The housing slump shows no signs of abating as sales of existing homes dropped for the 5th straight month:
Sales of existing homes dropped for a fifth straight month in July, falling to the slowest pace in nearly five years, while home prices fell for a record 12th consecutive month.
The National Association of Realtors reported that sales of existing homes dipped by 0.2 percent last month to a seasonally adjusted annual rate of 5.75 million units.
The median price of a home sold last month slid to $230,200, down by 0.6 percent from the median price a year ago. It marked the 12th consecutive month that home prices have declined, a record stretch.Is a recession on the way? Many analysts think that the Fed will ride to the rescue and cut short term rates to prevent an economic downturn. But with housing such a large segment of the American economy, any extended slump is worrisome. Also, some analysts pointed to the 1% increase in existing home sales in the Northeast as a sign that the worst of the slump may be behind us. That part of the country led the way in declining sales early in the year so a recovery there bodes well for the future.
But the number of unsold homes rose by more than 5% in July indicating it will be a while before we get any good news on the housing front.