Associated Press – Sales of existing homes drop to slowest pace in 4 years

Associated Press
Jun. 25, 2007 07:08 AM
 WASHINGTON – Reflecting further housing troubles, sales of existing homes fell in May to the lowest level in four years while the median home price dropped for a record 10th consecutive month.

The National Association of Realtors reported Monday that sales of existing single-family homes and condominiums dropped by 0.3 percent to 5.99 million units in May, the slowest sales pace since June of 2003.

The median price of a home sold last month dropped to $223,700, down 2.1 percent from a year ago. It marked the 10th straight price decline compared with a year ago, the longest stretch of weakness on record.

The sales decline reflected weakness in the South, where sales dropped by 3.4 percent, and the West, where sales were down by 0.8 percent.

Sales actually showed strength in the Northeast, rising by 5.8 percent, and the Midwest, where they were up 0.7 percent.

In a troubling sign for the future, the inventory of unsold homes rose by 5 percent to 4.43 million units in May, a level that would take 8.9 months to clear out at the May sales pace. That is the highest inventory level since the last deep slump in housing in 1992.

Analysts said housing is being hurt currently by high inventories and the recent crisis in subprime mortgages, which has caused lenders to tighten up on their