Housing Market Existing Home Sales Down 5-Year-Low

Existing home sales in August hit a five-year low, furthering a slowdown in housing that threatens to affect economic growth.

According to the National Association of Realtors in Washington, purchases of previously owned homes fell 4.3 percent to an annualized 5.5 million. Sales were down 13 percent in comparison with year-ago figures, while median home prices added 0.2 percent to $224,500.

A report by Bloomberg News suggests that sales are bound to decline since interest rates have climbed and mortgages are more difficult to finance. In August, inventories of unsold homes on the market was also higher, rising by 0.4 percent to 4.58 million - the equivalent to a 10-month supply.

Unsold single family homes account for a 9.8 month supply, which is the highest number in that category since May 1989. Median prices for single-family homes stayed the same year-over-year at $223,900, reports CBS MarketWatch.

“The housing market has decidedly taken a second leg down, largely in response to turmoil in the mortgage market,” Michelle Meyer, an economist at Lehman Brothers Holdings Inc. in New York, told Bloomberg. “The huge imbalance between demand and supply should put more downward pressure on home prices. We look for sales to fall through the middle of next year.”

Housing Market Takes A Second Leg Down With Existing Home Sales Hitting 5-Year-Low