WASHINGTON – Sales of existing homes posted a tiny increase in October, the first gain in eight months, but the median price of homes sold last month fell by a record amount.
The National Association of Realtors said Tuesday that existing home sales edged up 0.5 percent to a seasonally adjusted annual rate of 6.24 million. It marked the first sales increase since February.
However, the median, or midpoint, price for a home sold dropped to $221,000 in October, a decline of 3.5 percent from a year ago. That was the biggest year-over-year price decline on record. It marked the third straight month that home prices have fallen compared to the same period a year ago, the longest stretch of such declines on record.
Analysts said it was likely that home prices will continue declining for the rest of this year as reluctant sellers, accustomed to the booming market conditions of previous years, finally cut their asking prices.
The once-booming housing market, which had been one of the economy's standout performers for the past five years, has experienced a significant slowdown this year, which has dragged down overall economic growth.
Some analysts have worried that the correction in housing could be severe enough to drag the entire country into a recession. However, those fears have eased in recent months as a big fall in gasoline and other energy prices has provided support for consumer spending.
For October, sales were down 2.9 percent in the Northeast and 1.2 percent in the South. However, they rose by 6.4 percent in the West and were unchanged in the Midwest.