US home sales in sharp decline in December

| January 25, 2010
US home sales in sharp decline in December

The National Association of Realtors (NAR) has today revealed a sharp fall in sales of previously owned homes in the US for the month of December.

The industry body said sales fell 16.7% to an annual rate of 5.45 million units in December, down from 6.54 million the previous month. Analysts had expected a rate of 5.90 million units.

However, the NAR did highlight that the figure is 15% higher than the level seen in December 2008.

The NAR attributed December’s steep fall on the end of a rush to beat the original expiration of the $8,000 tax credit for first-time buyers. The tax credit had been due to expire on November 30, 2009 but has now been extended to April 30, 2010.

The figures will no doubt cause concern in the US since the housing market is one area that is crucial to the recovery of the world’s largest economy.

Recent figures have raised concerns that the housing market recovery might be faltering.

Lawrence Yun, the association’s chief economist, comments: “It’s significant that home sales remain above year-ago levels, but the market is going through a period of swings driven by the tax credit.

“By early summer the overall market should benefit from more balanced inventory, and sales are on track to rise again in 2010,” he added.

“However, the job market remains a concern and could dampen the housing recovery – job creation is key to a continued recovery in the second half of the year,” concluded Yun.

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