Washington – Sales of existing homes in the U.S. fell more than forecast last month, a sign that residential real estate remains mired in its worst recession in 16 years.
Purchases declined 3.8 percent to an annual rate of 5.75 million, the slowest pace since November 2002, from a revised 5.98 million in May, the National Association of Realtors said Wednesday. At the same time, the supply of homes for sale dropped for the first time this year and the median price rose for the first time in 11 months.
The housing slump, which slowed economic growth in the first quarter to the lowest level since 2002, is the biggest risk to the six-year economic expansion, according to Federal Reserve policymakers.
“There’s no evidence we’ve hit bottom yet,” said James O’Sullivan, senior economist at UBS Securities LLC in Stamford, Conn., who correctly forecast the drop in sales.
While “the inventory numbers are encouraging,” he added, “I wouldn’t celebrate yet.”
Resales were projected to fall 2.1 percent to a 5.86 million annual rate from a previously reported 5.99 million in May, according to the median estimate of 73 economists in a Bloomberg News survey.
The market “is bumping along the bottom,” Wachovia Corp. chief economist John Silvia said.
