Home sales: Worst drop in 18 years
Sales pace much lower than forecasts, prices show year-over-year drop for eighth straight month.
April 24 2007: 10:24 AM EDT
NEW YORK (CNNMoney.com) -- Existing home sales posted their sharpest drop in 18 years in March, a real estate group said Tuesday, as the latest reading on the troubled housing sector came in much weaker than economists had forecast.
Sales slowed to an annual pace of 6.12 million homes in March, according to the National Association of Realtors, down 8.4 percent from the 6.68 million rate in February. It was the biggest one-month drop since January 1989.
Home sales and prices both fell in March, according to the National Association of Realtors report.
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The group reported sharp drops in every region of the country as the annual pace of sales slowed to the weakest level since June 2003, before the record home sales and building boom that started that year.
Economists surveyed by Briefing.com had forecast sales would fall to an annual rate of 6.45 million in March
The median home price slipped 0.3 percent to $217,000 from a year earlier. That marked the eighth straight month that key price comparison has shown a decline. Earlier this month the trade group projected that 2007 would be the first year to show a decline it nearly 40 years that it has tracked prices.
Home sales and prices have been hurt by a glut of homes available for sale on the market.
Earlier this month, No. 2 home builder D.R. Horton (Charts, Fortune 500) reported a 37 percent drop in the number of new homes it sold in the latest quarter, citing continued weakness in prices and saying the typical start to the spring home buying season hasn't begun.
While Horton is expected to still report a profit for the period, No. 3 builder Pulte Homes (Charts, Fortune 500) reported a loss in its latest quarter as did No. 4 Centex (Charts, Fortune 500) and New Jersey-based Hovnanian Enterprises (Charts, Fortune 500).
No. 1 home builder Lennar (Charts, Fortune 500) and No. 5 KB Home (Charts, Fortune 500) both reported losses in their quarters ending in November, although both returned to an operating profit in the next quarter. The CEO of KB Home said earlier this month that he expects the housing slump to get worse.
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