Home Sales Decline Even Worse Than Forecast

WASHINGTON – Not too surprisingly, the National Association of Realtors is reporting that during August the number of Americans signing contracts to buy previously owned homes fell even more than forecast. The NAR said signed purchase agreements dropped 6.5% from July to the lowest level since it began keeping records in 2001. The drop followed an 11% decline in July. Analysts are predicting that stricter lending guidelines and higher borrowing costs resulting from the credit crisis that emerged during August will serve to push sales down even more when that data is reported, and that the real estate market slump will continue into 2008. “The housing market has yet to reach bottom,” Jeffrey Roach, chief economist at Horizon Investments LLC in Charlotte, told the American Banker. More than 10% of signed contracts fell through in August because buyers could not secure financing.