More Signs Of Weakness In Housing As Existing Home Sales Drop Again

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Sales of previously owned homes dropped again in January, adding to the sharp decline seen in the final month of last year.

This is the second major housing report this week to indicate that the sector remains in a serious slump, as lending remains tight and a large supply of potential foreclosures impacts the market.

Existing home sales fell 7.2 percent in January compared to the previous month, according to a report released by the National Association of Realtors. The figure came in at a seasonally adjusted annual rate of 5.05 million units - its lowest level in seven months.

January's decline followed a 16.2 percent plunge in December, which was the largest on record. A key tax credit had been scheduled to expire in November, which encouraged many buyers to get deals done before the deadline. This credit has since been extended, but the original deadline was a factor in the sharp drop off at the end of last year.

While the month-to-month figure showed a decline, sales did rise from the same period in 2009. Compared to last year, January's figure represented an 11.5 percent improvement.

Sales dropped throughout the country. The decline was led by a 10.9 percent slide in the Northeast. There were also drops of 7.4 percent in the South, 6.9% in the Midwest and 5.2 percent in the West.

Sales of single-family homes dropped 6.9 percent. The median sales price for homes was $164,700 in January. This was unchanged from last year.

The recent data suggested that foreclosures are playing a role in dampening the housing market - a point many experts have been making lately. The National Association of Realtors revealed that distressed sales made up 38 percent of sales in January. This was up from 32 percent in December.

Inventories of unsold homes edged down in January. The number slipped 0.5 percent to 3.265 million. This equates to a 7.8-month supply at current sales pace.

Earlier this week, a government report indicated that sales of newly built homes dropped 11.2 percent in January to an annual rate of 309,000. This was the slowest pace of sales since records began being kept in 1963.

Sales of previously owned homes dropped again in January, adding to the sharp decline seen in the final month of last year. This is the second major housing report this week to indicate that the sector remains in a serious slump, as lending remains tight and a large supply of potential foreclosures impacts the market. Existing home sales fell 7.2 percent in January compared to the previous month, according to a report released by the National Association of Realtors. (Market News Provided by RTTNews)