Monday, January 24, 2011

2010 weakest year for US home sales since 1997


The number of people in the United States who bought previously- owned homes last year fell to the lowest level in 13 years. But home sales in December jumped to the fastest pace in seven months.
The National Association of Realtors says sales dropped 4.8 per cent to 4.91 million units in 2010. That was slightly lower than 2008, which had been the weakest level since 1997.
Home prices have been de-pressed by a record number of foreclosures and high unemployment. Many potential buyers held off on purchases last year, fearful that prices hadn’t bottomed out yet.
The poor year for sales ended strong in December. Buyers snapped up homes at a seasonally adjusted annual rate of 5.28 million units, an increase of 12.8 per cent from November and the strongest sales pace since last May.
Still, many economists believe it will take years for sales to rise to a normal level of around six million units a year. And some say 2011 will be even weaker than last year because more foreclosures are expected and home prices are likely to keep falling through the first six months of the year.
The foreclosure crisis has left a glut of unsold houses on the market. That has played a major role in lowering home prices.
For December, the inventory of unsold homes stood at an 8.1 months supply, down from 9.5 months supply in November. That represents the amount of time it would take to sell the remaining supply of homes on the market at the December sales pace. A normal inventory supply is six months.
Even historically low mortgage rates have done little to boost the sales

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