USA: Home Sales Continue Downwards

The USA housing market remained sluggish last month with sales of homes at their lowest level in four years. Sales fell 0.3 percent to 5.99 million units in May, the lowest rate of sales since June 2003, according to the National Association of Realtors.

There was also bad news from Lennar, America’s biggest housebuilder, which announced a $244.2 million (£122 million) loss for the second quarter of 2007. Lennar’s average house price fell by 7.5 per cent to $298,000.

Lennar’s chief executive, Stuart Miller, said: “As we look to our third quarter and the remainder of 2007, we continue to see weak, and perhaps deteriorating, market conditions. We currently expect to be in a loss position in our third quarter.”

House sales in the United States are now 10% lower than a year ago, when 6.68 million units were sold.

The sharp downturn in the housing market, after years of high growth, has shown little sign of bottoming out.

The number of homes for sale rose 5% to a 15-year high of 4.43 million units, almost double the supply from two years ago.

The median price of an US home is now $223,700 (£111.850), 2.1% less than in May 2006.

Northeast
Home sales in the Northeast rose 5.8 percent to a level of 1.10 million in May, but were 3.5 percent lower than May 2006. The median home price was $282,700 (£141,350), which is 0.5 percent higher than a year ago.

Midwest
Home sales rose 0.7 percent in May to a level of 1.41 million, but were 6.6 percent below a year ago. The median price in the Midwest was $168,800 (£84,400) which was 1.7 percent below May 2006.

West
Home sales in the West slipped 0.8 percent in May to an annual pace of 1.18 million, and were 16.3 percent below May 2006. The median price was $341,900 (£170,950), which is 0.5 percent lower than a year ago.

South
Home sales fell 3.4 percent to an annual sales rate of 2.30 million in May, and were 11.9 percent below a year ago. The median price in the South was $184,000 (£92,000), down 3.8 percent from May 2006.