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US existing home sales down in May

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by Kay Mitchell
”US

The US housing market remains depressed after figures today revealed sales of previously owned homes plunged 15% on an annual basis last month, according to the National Association of Realtors (NAR).

The industry body also said sales were down 3.8% on the previous month to a seasonally adjusted annual rate of 4.81 million units – below forecasts.

However, the NAR points out that the harsh weather and rising petrol prices last month led to a fall in closings.

Demand for housing in the US remains weak, despite mortgage rates hovering at record lows and falling house prices – the latter due to millions of home repossessions.

Further house price falls are likely this year as high unemployment impacts negatively on the housing market.

NAR chief economist Lawrence Yun comments: “There’s been a pendulum swing from very loose standards which led to the housing boom to unnecessarily restrictive practices as an over-reaction to the housing correction.

“This over-reaction is clearly holding back the recovery,” he added.

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News posted: June 21, 2011

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