Existing home sales declined almost 17 percent in December, the largest in more than 40 years — and the latest sign that the economy and the housing market continue to struggle.
Despite the larger-than-expected decline, the nation’s median home price increased 1.5 percent to $178,300, the first increase since August 2007, according to the national association. Nationwide, home sales have increased 21 percent from a year ago, but are off 25 percent from the housing peak in 2006.
December’s existing home sales plummeted 16.7 percent to a seasonally adjusted rate of 5.45 million, or almost 1 million fewer than the 6.54 million in November, according to the National Association of Realtors on Monday. Thomson Reuters economists expected a much lower 10 percent decline last month compared to November.
A federal program to encourage first-time homebuyers with an $8,000 tax credit was extended to April 30, and established a $6,500 credit for existing homeowners who move into another house. But the concern is the glut of homebuyers who scrambled to buy homes in recent months has declined and is putting pressure on the housing market to find new buyers without the benefit of a federal tax credit in less than four months, unless lawmakers approve another extension.
Excerpt from the Sacramento Business Journal, January 25, 2010