Existing Home Sales Down for Third Month : Realtors Group Says Crash Partly to Blame

Sales of existing homes dropped 3.6% in January, the third consecutive monthly decline, a real estate trade group said Friday. The decrease pushed activity to its slowest level in 2 1/2 years.

The National Assn. of Realtors said sales of existing single-family homes dropped to a seasonally adjusted annual rate of 3.21 million units last month, following declines of 1.2% in December and 2.9% in November. The association said consumer fears raised by the collapse of the stock market in October were partly to blame for the slowdown.

The sales decline was accompanied by an increase in home prices, which rose $2,500 to a median price of $87,900 in January, up 6% from a year ago.

The decline in sales pushed the annual sales rate, the number of homes that would be sold if the monthly sales pace continued for a year, to its lowest level since June, 1985.

John Tuccillo, the association’s chief economist, said he did not believe that the downturn in housing would be permanent or would lead to a recession.

“Anecdotal evidence suggests that sales in February were more brisk than in January,” he said, crediting lower mortgage rates and better economic news for the rebound.

Most Regions Hurt

The Federal Home Loan Mortgage Corp. reported Friday that its nationwide survey found 30-year mortgages had dipped to 9.87% this week, down from 9.92% the previous week. The new rate is almost a full percentage point below where it was at the beginning of the year.

Sales were off in every region of the country in January except the Midwest, which posted a 4.5% gain to an annual rate of 920,000 units.

Sales dropped 12.2% in the West to a rate of 500,000 units and fell 9.6% in the South to a rate of 1.12 million units. Sales fell 4.7% in the Northeast to 610,000 units, a decline blamed in part on job layoffs in the New York financial district following the market crash.

But the Northeast continued to report the fastest jump in home prices, a 14% gain over the past 12 months to a median price of $135,000.

The West was close behind with a 12.2% rise in home prices over the past year, pushing the median sales price to $116,000. The South, where sales have been depressed by weakness in energy and farming, saw prices rise 3.7% to $82,000. In the Midwest, home prices rose 3% to $67,400.