This was written by CNBC producer, Robert Hum
The markets were already down just after the open, but doubled their losses following the National Association of Realtors’ disappointing existing home sales report.
Traders note that the market’s reaction to today’s report serves as a reminder that stabilizing the housing market – the heart of this economic crisis - is critical before an economic recovery can occur.
Evidently, the report shows that many people are still reluctant to jump into the market to buy a house even despite the current depressed prices in the market.
Sales of existing home sales fell to 4.49 million in January (its lowest level since July 1997), and came in below the street’s expectation of 4.79 million. This was a drop of 5.3% from December’s level. Additionally, almost half of those sales last month were a result of foreclosed or distressed properties.
The continuing fall of housing prices couldn’t help stimulate purchases either. The median price of homes being resold fell to 6-year low of $170,300, down 3% from December. Over the past year, the median price was down nearly 15%.
One piece of good news from the report: inventory of existing sales fell 2.7% in January.
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