Sales of existing homes slid a worse-than-expected 1.2% in October as tough times in the mortgage market exacerbated the housing market's widespread weakness.
The National Association of Realtors reported Wednesday that sales of already-built homes reached a seasonably adjusted annual rate of 4.97 million units in October. That was down from a rate of 5.03 million in September -- a figure that was downwardly revised -- and marked a 20.7% plunge from the same month a year ago.
Economists expected a sales rate of 5 million homes, according to
The results were brought down by a 9.1% drop in sales of condos compared with October. Sales of single-family homes were flat.
Existing-home sales are based on home closings, and the NAR pointed out that many of the sales closed in October were being negotiated in August, when the credit crunch and mortgage problems were in the spotlight.
The realtor group believes the mortgage situation has "improved significantly," though high-priced markets where consumers rely on so-called jumbo loans are seeing weakness.
The national median existing-home price for all housing types fell 5.1% from a year earlier to $207,800. That was pulled down in part by the drop in jumbo loans -- mortgages over $417,000 -- that slowed sales of expensive homes.
Indeed, the median price of single-family homes, which tend to be the most expensive, tumbled 6.3% from a year earlier. Condos saw a median price rise of 4.9%, despite the overall drop in sales.
Overall sales continue to be weighed down by an overflow of homes on the market. Total housing inventory jumped 1.9% at the end of October to 4.45 million homes. At the current sales pace, that represents 10.8 months of supply.
The Census Bureau will issue its report on new-home sales on Thursday. New-home sales, which represent a much smaller portion of the housing market, are based on contracts, not closings.
Despite the seemingly dismal housing news, shares of homebuilders were rallying along with the broader market. Among them,
was adding 72 cents, or 3.9%, to $19;
was up 51 cents, or 3.5%, to $15; and
was climbing 84 cents, or 4.6%, to $19.22.