Existing home sales rise as low prices lure buyers

WASHINGTON -- Previously occupied homes rose modestly from March to April as buyers swooped in to take advantage of prices that were 15.4% below year-ago levels.

The National Association of Realtors said Wednesday that home sales rose 2.9% to an annual rate of 4.68 million last month, from a downwardly revised pace of 4.55 million in March.

The results slightly beat economists' forecasts. Sales had been expected to rise to an annual pace of 4.66 million units, according to Thomson Reuters.

The median sales price was $172,000, down from $201,300 in the same month last year. That was the second-largest drop on record after January, when prices fell 17.5%.

The number of unsold homes on the market at the end of April rose almost 9% from a month earlier to nearly 4 million. That's a 10-month supply at the current sales pace.

"We still need a continuing and consistent rise in home sales to get the inventory down," said Lawrence Yun, the group's chief economist. Only then, economists say, will prices stabilize and eventually recover.

Another big problem, Yun noted, is the lack of activity at the higher-end of the housing market, among properties priced at $750,000 or higher.

Interest rates are much higher for loans above $730,000 that cannot be purchased by Fannie Mae or Freddie Mac. And that's sapping demand for expensive properties.

"It's just stalled. completely stalled," Yun said. The Realtors group is pushing for the Federal Reserve to start buying up those loans, even if they are not backed by Fannie and Freddie. It also wants the higher loan limits to apply to the whole country, not just expensive areas like California and New York.

A separate report said home prices fell in the first quarter but the pace of decline eased a bit from the record drop seen in the final three months of 2008.

The Federal Housing Finance Agency said home prices were down 7.1% in the January-March period, compared with a year ago. That marked a slowdown from the 8.3% drop in the fourth quarter, the largest on records dating to 1991.