US Dec Existing Home Sales Dn 16.7% To 5.45 Mln Rate

US Dec Existing Home Sales Dn 16.7% To 5.45 Mln Rate
============================================================ Dec Existing Home Sales       Dec     Nov  ! Consensus:    ! Total Sales:                5.45M   6.54M  !        5.78M  !    % Change:               -16.7%   +7.4%  ! Actual:       !    Months Supply:             7.2     6.5  !        5.45M  ! ============================================================    By Jeff Bater    Of DOW JONES NEWSWIRES  

WASHINGTON (Dow Jones)--Existing-home sales plunged in December, dropping lower than expected after three straight increases that were fed by a fat government tax credit

Home resales fell by 16.7% to a 5.45 million annual rate from an unrevised 6.54 million in November, the National Association of Realtors said Monday.

Monday's data said inventories shrank, and prices rose year over year for the first time in more than two years.

Economists surveyed by Dow Jones Newswires expected an 11.6% decrease in sales during December, to a rate of 5.78 million.

Banks are making it difficult for some people to get loans. Joblessness in the U.S. is high, muting the economy's recovery.

"The market is going through a period of swings driven by the tax credit," NAR economist Lawrence Yun said. "We'll likely have another surge in the spring as home buyers take advantage of the extended and expanded tax credit."

Before the big drop last month, sales had gone up three straight times. Prices and borrowing costs are low. Plus, first-time buyers can get the $8,000 tax relief.

For all of 2009, there were 5.16 million home sales, up 4.9% from 4.91 million in 2008. It was the first annual sales gain since 2005.

November 2009 existing-home sales rose an unrevised 7.4%.

Realtors had expected a pullback in December. They see a sales surge in the spring. Whether sales keep recovering after the tax credit expires depends on employment in the U.S., Yun said. "The job market remains a concern and could dampen the housing recovery," he said.

The average 30-year mortgage rate was 4.93% in December, up from 4.88% in November, Freddie Mac data showed. The NAR reported the median price for an existing home last month was $178,300, up 1.5% from $175,700 in December 2008.

Inventories of previously owned homes decreased by 6.6% at the end of December to 3.29 million available for sale. That represented a 7.2-month supply at the current sales pace, compared to 6.5 in November.

Regionally, sales in December compared to November decreased 19.5% in the Northeast, 25.8% in the Midwest, 16.3% in the South, and 4.8% in the West.

Of the 5.45 million in overall U.S. resales, 32% were distressed, which includes foreclosures. That compares to a range of 45% to 50% in months during late 2008 and early 2009.

    -By Jeff Bater, Dow Jones Newswires; 202 862 9249;  

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(END) Dow Jones Newswires

January 25, 2010 10:00 ET (15:00 GMT)

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