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US home sales decline yet further US home sales decline yet further
(about 1 hour later)
Concern that US house prices could fall sharply has returned after a key survey showed that sales fell to a near five-year low in the year to July.Concern that US house prices could fall sharply has returned after a key survey showed that sales fell to a near five-year low in the year to July.
Sales of existing homes fell 0.2% to 5.75 million units in the year, the lowest since November 2002, said the National Association of Realtors (NAR).Sales of existing homes fell 0.2% to 5.75 million units in the year, the lowest since November 2002, said the National Association of Realtors (NAR).
It marks the first time that the US's main estate agent body had reported a decline in 12 consecutive months.It marks the first time that the US's main estate agent body had reported a decline in 12 consecutive months.
Last week a separate study said sales of new homes surprisingly rose in July.Last week a separate study said sales of new homes surprisingly rose in July.
That finding gave Wall Street a major boost on Friday, but the latest NAR data caused the main US share indexes to fall by early afternoon trading in New York.That finding gave Wall Street a major boost on Friday, but the latest NAR data caused the main US share indexes to fall by early afternoon trading in New York.
The Dow Jones was down 31 points to 13,348, while the Nasdaq had lost 12 points to 2,564.The Dow Jones was down 31 points to 13,348, while the Nasdaq had lost 12 points to 2,564.
'Downturn intensifying''Downturn intensifying'
NAR added that the supply of unsold single-family homes has now hit its highest level in 16 years.NAR added that the supply of unsold single-family homes has now hit its highest level in 16 years.
"This shows that the housing downturn continues to intensify," said Moody's economist Mark Zandi."This shows that the housing downturn continues to intensify," said Moody's economist Mark Zandi.
"It shows no sign of abating."It shows no sign of abating.
"It's a large amount of unsold homes, and it's really weighing on the market.""It's a large amount of unsold homes, and it's really weighing on the market."
Concerns over the US housing sector, and the resulting market turmoil of recent weeks, centred on the so-called sub-prime mortgage sector.Concerns over the US housing sector, and the resulting market turmoil of recent weeks, centred on the so-called sub-prime mortgage sector.
This gives higher risk loans to people with poor credit histories.This gives higher risk loans to people with poor credit histories.
Sub-prime default levels have risen to record highs over the past year in the face of higher US mortgage rates, raising fears that this could hamper credit availability in the broader market.Sub-prime default levels have risen to record highs over the past year in the face of higher US mortgage rates, raising fears that this could hamper credit availability in the broader market.
Investor confidence was further hit on Monday after Goldman Sachs analyst William Tanona cut his third-quarter earnings forecasts for three firms exposed to the sub-prime slump - Bear Stearns, Lehman Brothers and Morgan Stanley.