Existing Home Sales Tumbled in September

Sales of U.S. existing homes tumbled 11.7 percent in September, a real estate trade group said Thursday, as the Sept. 11 attacks brought transactions to a virtual standstill for a week.

The National Association of Realtors said previously owned homes sold at a seasonally adjusted annual pace of 4.89 million units last month, down from a revised rate of 5.54 million units in August.

The drop was the largest since existing home sales fell 12.5 percent in April 1995. The pace of 4.89 million units fell short of forecasts from analysts polled by Reuters, who expected on average a rate of 5.2 million units.

The rate of sales was the lowest since July 2000, when houses sold at a seasonally adjusted annual rate of 4.83 million units.

"This is not surprising given the terrorist impact of the week of Sept. 11," said David Lereah, chief economist for the NAR.

Lereah said home sales activity was significantly disrupted in the days following the attacks on New York's World Trade Center and the Pentagon, which killed thousands of people. Contracts and closings that week came to an almost complete halt around the country, he said.

Nationally, real estate business has returned to about 95 percent of the pre-attack level, he added.

The median national home price fell to $148,100 from August's record level of $153,700, but was still 4.6 percent higher than September a year ago.

The inventory of homes available for sale rose to 5.4 months' supply at current sales rates, up from 4.8 months' supply in August, NAR said.