Sales of existing homes fell by a larger-than-expected amount in April while the median price of a home sold during the month fell for a ninth straight month as the troubles in the subprime mortgage market acted as a further drag on housing.Do we have a new David Lereah on our hands? Always blaming the weather?
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Sales were weak in all parts of the country. The Northeast experienced the biggest decline, a fall of 8.8 percent in April from the March sales pace. Sales were down 1.7 percent in the West, 1.2 percent in the Midwest and 0.7 percent in the South.
The drop in sales was accompanied by a big jump in the number of unsold homes left on the market. They climbed to a record total of 4.2 million. It would take 8.4 months to exhaust that supply of homes at the April sales pace.
Analysts are concerned that the glut of unsold homes will further depress prices in coming months.
But Lawrence Yun, senior economist for the Realtors, said that the small year-over-year price decline of less than 1 percent was still modest compared to the 50 percent rise in home prices that occurred during the five boom years that ended last year.My suspicion about early-season sales: buyers were anticipating higher prices in the spring (thinking "it always happens"), and rushed to get the "deals" in the winter months. Others lowballed leftovers from last year.
Yun said some of the weakness in April reflected a weather payback after sales had shown gains at the beginning of the year, reflecting warmer-than-normal winter weather.