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Us Home Resales Lowest In Nearly 5 Years

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By Eoin Callan in Washington Published: August 27 2007 16:17

The US housing downturn appeared to worsen last month as sales by Americans of their homes fell to the lowest level in nearly five years amid a crisis in the subprime mortgage market that has triggered a global credit crunch.

Purchases of existing homes were 9 per cent lower than a year ago as sales fell for the fifth straight month, with a drop of 0.2 per cent in July to an annual rate of 5.75m units, according to the National Association of Realtors.

The fall in sales and a rise in inventories of unsold homes adds to fears that recent signs of stabilisation in the housing market were temporary and that the sector will fall further amid tighter lending conditions.

Economists fear a vicious circle as rising defaults on high-risk subprime mortgages trigger a crisis of confidence in credit markets that will weigh on demand and make it more difficult for distressed homeowners to sell or refinance their property.

The fresh figures showed inventories of unsold homes rose to a level regarded as unsustainable, with the supply of single family homes rising to 9.2 months worth of sales and the number of condominiums reaching a year’s supply.

The FT, not know for great hyperbole, is increasingly bearish on this. That can only add to the downward spiral of sentiment.

TD

Edited by The Dragon

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The FT, not know for great hyperbole, is increasingly bearish on this. That can only add to the downward spiral of sentiment.

TD

The DOW is not to bothered, it has just gone positive. The 10% fall that is rapidly being erased has discounted for all of this already! :rolleyes:

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