U.S. Home Resales Fall; Prices Drop by Record 13.2%

by Dave Keating | December 23, 2008 at 08:10 am

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Home sales in the US are falling rapidly, and economists are predicting that they will fall further as increasing unemployment saps demand for new homes, even though interest rates have been cut so dramatically.

Sales of previously owned homes in the U.S. fell more than forecast in November and prices dropped by the most on record, indicating the real estate slump will extend into a fourth year and worsen the recession.

Purchases declined 8.6 percent to an annual rate of 4.49 million, from a 4.91 million rate in October that was less than previously estimated, the National Association of Realtors said today in Washington. The median price dropped 13.2 percent from a year earlier, the biggest decline since records started in 1968. Separately, the Commerce Department reported today that new-home sales fell 2.9 percent last month to a 17-year low.