Existing-home sales drop 2.2% in December

Existing-home sales declined in December, illustrating the weakness of the U.S. real estate market according to a report released today by the National Association of Realtors. For all of 2007, the median sales price of an existing single-family home fell 1.8%. Existing home sales, which account for single family, town homes, condominiums and co-ops, declined 2.2%. Seasonally adjusted, total sales for existing homes in December accounted for 4.89 million units. Total sales of existing homes are down from 5 million units in November of 2007, and down 22% from the 6.27 million units sold in December of 2006. “Home sales remain weak despite improved affordability conditions in many parts of the country, but we could get a quick boost to the market if loan limits are raised in combination with the bold cut in the Fed funds rate,” said Lawrence Yun, chief economist for the NAR, in a statement. Prices of homes sold in December registered the biggest year-over-year decline on record, according to an industry trade group, and 2007 is the first year on record that has seen a drop. A report issued Thursday showed the problems in the housing market have not yet bottomed out.