US home sales dip after 4 monthly rises

[Naveed Yaseen]

WASHINGTON: US existing home sales fell 2.7 per cent in August as buying fever eased after four consecutive monthly increases, industry data showed on Thursday.

The National Association of Realtors said August home sales dropped to a seasonally adjusted annual rate of 5.10 million units in August. That was down from July but 3.4 per cent higher than the level of August 2008.

In the previous four months, sales had risen a total of 15.2 per cent, the group said.

Lawrence Yun, NAR chief economist, said the tax credit for new home buyers under the US economic stimulus program is working.

“Home sales retrenched from a very strong improvement in July but continue to be much higher than before the stimulus,” he said.

“The first-time buyer tax credit is having the intended impact of bringing buyers into the market, allowing them to take advantage of very favorable affordability conditions.”

He said some of the decline may stem from “a backlog contributing to a longer closing process,” but added that “the decline demonstrates we can’t take a housing rebound for granted.”

The collapse of a housing bubble plunged the US economy into recession in 2007 and hit the worldwide financial system that had been betting heavily in the sector.

In August, the national price for all housing types was $177,700, down 12.5 per cent from a year earlier and marginally lower than the level of $178,400 in July.

The association said “distressed” properties continue to distort the median price because they generally sell for 15 to 20 per cent less than other homes.

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