Sales of previously occupied homes rise 7.6 pct. in August; sales second-worst in decade

By Alan Zibel, AP
Thursday, September 23, 2010

Home sales up 7.6 pct. in August; sales still weak

WASHINGTON — Sales of previously occupied homes rose last month, but not enough to keep August from being the second-worst month for sales in more than a decade.

Sales rose 7.6 percent in August from July to a seasonally adjusted annual rate of 4.13 million, the National Association of Realtors said Thursday. Sales were down 19 percent from the same month a year earlier.

July was the worst month for sales in 15 years. That was unchanged by a slightly upward revision.

High unemployment and a record number of foreclosures have kept the economy from gaining strength since the recession ended. Those factors have also deterred many people from buying homes.

The housing industry received a boost this spring when the government offered home-buying tax credits. But it has struggled since those expired in April.

Low prices and the cheapest mortgage rates in decades haven’t been enough to lift the housing market.

The median sale price was $178,600, up 0.8 percent from a year ago.

On Thursday, mortgage buyer Freddie Mac said the average rate on a 30-year fixed mortgage was unchanged at 4.37 percent. Earlier this month, the rate dipped to 4.32 percent, which was the lowest level on records dating back to 1971.

Potential buyers are still nervous, said Eric Matz, a real estate agent with Coldwell Banker in the San Diego area.

“Nobody wants to see their investment go down after they buy it,” he said. “It’s as tough as I’ve ever seen it.”

Homebuilders, who normally power economic recoveries, have kept construction low rather than try to compete with all the unsold properties. With nearly 4 million homes on the market, it would take about a year to exhaust that supply at the current sales pace.

About 2.5 million homes have been lost to foreclosure since the recession started in December 2007, according to RealtyTrac Inc. And another 3.3 million homes could be lost to foreclosure or distressed sale over the next four years, according to Moody’s Analytics.

Sales grew last month across the country. They rose by nearly 14 percent from a month earlier in the West, 8 percent in the Northeast and 5 percent in the Midwest and South.

will not be displayed