Home prices fall in Bay Area

Reluctant buyers and tightened mortgage lending combined to drag down October’s home sales in a nine-county region around San Francisco Bay to the lowest level in more than 20 years, a real estate research firm said Thursday.

A total of 5,486 homes were sold in the region last month, down 35.7% from 8,532 in October 2006, according to DataQuick Information Systems. Sales increased 9.4% from September.

It was the slowest October since DataQuick began keeping records in 1988. The previous low came in October 1990, when 6,443 homes were sold. The sales average for the month of October is 8,930 homes.

Many lenders have tightened underwriting guidelines in recent months amid rising home loan defaults and foreclosures.

Lenders have cut back on so-called jumbo loans -- those exceeding $417,000, the current limit on the amount that government-backed mortgage companies Fannie Mae and Freddie Mac will buy from lenders.

That poses a problem for many potential buyers in states such as California that have a high number of homes valued in excess of $417,000.