Home sales edge down, prices drop
The pace of existing home sales in the United States fell for a fifth straight month in August and prices dropped from year-ago levels for the first time in 11 years, a U.S. realtors group said on Monday.
Still, some economists said they saw signs the housing market was beginning to stabilize as the decline in sales showed some signs of leveling off.
"I think the worst of the drops (in existing home sales) are probably behind us, but it is way too early to say that we are at the bottom," said Mark Vitner, senior economist with Wachovia bank.
The National Association of Realtors said existing homes sales slipped to an annual rate of 6.30 million units from 6.33 million in July.
But the 0.5 percent fall-off in volume was the smallest in the last five months of declines and was not as steep as expected on Wall Street, where economists had looked for the pace to slow to 6.18 million units.
The report, however, did show prices also have begun to drop compared to the lofty levels of last year, when many parts of the country saw home prices appreciate at double-digit annual rates.
The median price slipped to $225,000, off 1.7 percent from August 2005. It was the first year-on-year price decline for the U.S. existing home market since a 0.1 percent drop in April 1995.
The price drop helped lift prices for U.S. government bonds as some analysts saw it as suggesting the
Federal Reserve may have to lower benchmark interest rates in coming months.
Stock prices, however, closed higher, bolstered by lower market interest rates and the better-than-expected reading on home sales. The value of the dollar also rose.
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