Existing Home Sales Continue to Be Lethargic

Sales of existing homes remained sluggish in California and the rest of the nation last month as the lowest mortgage interest rates in two decades failed to jolt the country’s housing market back to life, real estate groups said Monday.

The Los Angeles-based California Assn. of Realtors said resales in the state were made at a seasonally adjusted annual rate of 374,220 units in September, up a meager one-half of 1% from August but down 3.6% from September, 1991.

In a separate report, the National Assn. of Realtors said existing home sales across the country slipped 1% in September from August but rose 5.1% from year-earlier levels.

Some housing experts had expected a sales pickup in September because rates on fixed, 30-year loans had dropped below 8% to their lowest levels since 1973.

But lower rates and slightly softer prices apparently didn’t persuade jittery consumers to buy a new home.

“It’s hard to remember the last time that home-buying conditions were this good, but people are still worried about the economy and they’re just not buying,” said John Tuccillo, chief economist for the National Assn. of Realtors.

“Low rates don’t mean a thing if you don’t have a job, or if you’re worried about losing the one that you’ve got.”

Realtors struggled to find bright spots in the two reports’ generally dismal statistics.

Officials of the California trade group pointed out that the median price of a home in the state rose about one-half of 1% in September, to $196,500 from $195,370 in August.

Resales surged 10% in Orange County, but rose only 3% in San Diego and 1% in Los Angeles, Riverside and San Bernardino counties.

National statistics were even bleaker.

Sales across the country were made at a seasonally adjusted 3.28-million annual rate, down from August’s 3.31-million rate. It was the second monthly decline in a row and the slowest sales pace since January.

The median price of a U.S. home also slipped about 1% last month, to $103,200 from $104,600 in August.

Sales rose about 2% in the Northeast and 1% in the South. But they dropped 5.6% in the West and 1% in the Midwest.

The disappointing sales news prompted the national trade group to renew its call for President Bush to sign a bill that would allow first-time home buyers to make penalty-free withdrawals from individual retirement accounts if the money is used to purchase a house.