US existing home sales fall 2.7 percent

By VIKAS BAJAJ
Published: November 28, 2005
Sales of existing homes fell in October from their second-highest level ever the month before and the inventory of houses and condominiums on the market rose to their highest level in more than two years, an industry trade group reported today.

In another indication of a modest slowdown in the booming housing market, the National Association of Realtors said that home sales fell to an annual pace of 7.09 million from 7.29 million in September. In October, there were enough homes for sale to keep the market supplied for 4.9 months, the most since June 2003.

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Over all, the report echoes the slowdown seen in other measures of the housing market, like home construction, new home prices and mortgage applications. Economists and real estate industry officials have said the slowdown appears to be tied to a rise in interest rates and, in some hot markets, worries that home prices had risen too fast because of speculation.

The report also appears to confirm the anecdotal reports from real estate agents and others that homes were taking longer to sell, a fact that portends a decline in sales and prices in the coming months, economists said. The inventory increase in condominiums and co-ops, of which there was a 5.5 month supply in October, up from 5.1 months in September, has been particularly sharp in recent months. There was a 4.8 month supply of single-family homes, up from 4.5 months.

Economists and real estate industry officials have said the slowdown appears to be tied to a rise in interest rates and, in some hot markets, worries that home prices had risen too fast because of speculation.