Existing-home sales fell for the eighth time in the last nine months in April, a string of weakness that is expected to continue as the housing industry battles falling home prices, tight lending conditions and a weak economy.
The National Assn. of Realtors reported Friday that existing-home sales dropped by 1% to a seasonally adjusted annual rate of 4.89 million units, matching the all-time low set in January. These records, which cover single-family homes and condominiums, go back to 1999.
The median price for an existing home fell 8% compared with a year earlier to $202,300. It was the second-largest price decline on record, and analysts predicted that prices would drop further in the months ahead given the huge backlog of unsold single-family homes.
The number of unsold single-family homes in April rose to a 10.7-month supply at the current sales pace, the highest level since June 1985.
In California, home prices tumbled 32% in April from a year earlier as "distressed" properties and a lack of financing cut demand, the state Realtors group said.
The median existing-home price fell to $403,870 from $594,110, the California Assn. of Realtors said. Sales increased 2.5%, ending 30 months of consecutive year-on-year declines. Homes priced under $500,000 accounted for 64% of sales, compared with 40% a year earlier.
"The housing market continues to slide away. The very large increase in inventories suggests that there are much larger price declines coming," said Mark Zandi, chief economist at Moody's Economy.com.
Sales were down the most in the Midwest, a drop of 6%, followed by a 4.4% decline in the Northeast. Sales were up 6.4% in the West, the region of the country where prices had fallen by the sharpest amount, and were unchanged in the South.
Even with the weak results for April, Lawrence Yun, chief economist for the national Realtors group, said he saw reasons for optimism that sales would start to rebound in the second half of this year as more types of mortgages become available, including programs supported by mortgage giants Fannie Mae and Freddie Mac and the government's Federal Housing Administration.
"I would encourage buyers who were disappointed by poor mortgage options to take another look at the market because the lending changes are significant," Yun said. "The second half of the year should be notably better in terms of home sales."
Yun noted that some areas of the country where prices have dropped by double-digit amounts, such as San Diego and Fort Myers, Fla., were starting to see sales increase now because prices have fallen enough to lure buyers back into the market. He said the sales increase in the West could be attributed in part to the fact that this region saw prices fall the most in April.
Although the decline in the median price -- the midpoint where half the homes sold for more and half for less -- was 8% compared with April 2007, the price decline in the West was 16.7%. Prices fell 7.7% in the Northeast, 5.1% in the South and 2.9% in the Midwest.