The ailing housing market got a bit of a bump last month, as steadily falling home prices led to a small increase in sales, a realty group said Thursday.þþSales of previously owned homes, which make up most of the nation’s housing market, increased 2 percent in May, reversing two months of declines. Sales ran at an annualized pace of 4.99 million, up from 4.89 million in April, according to a report from the National Association of Realtors, an industry group. þþThough sales were up for the month, economists said that May was an anomaly amid a broader downward trend. þþ“We do not expect residential real estate markets to turn around soon,” Stuart G. Hoffman, the chief economist of PNC Bank, wrote in a note to clients. “Buyers still face significant disincentives as home prices continue to drop in most markets.”þþSeasonal factors were cited by economists as an impetus for the rise in sales. Some warned that conditions had deteriorated since the data for the report was recorded.þþ“Unemployment and mortgage rates have risen further, and consumers have moved closer to a breakdown,” Dimitry Fleming, an economist at ING Bank in London, wrote in a note. “We doubt a further recovery is at hand.”þþSales of single-family homes were up 1.6 percent, and sales of apartments and condominiums increased by 5.5 percent. Sales rose 5.5 percent in the Midwest, 4.6 percent in the Northeast and 2 percent in the West. In the South, sales dropped 0.5 percent.þþValues rose as well, with the median price rising to $208,600, from $201,200 in April. Prices moved higher for both single-family and multifamily dwellings. þþThe high level of inventories still poses a problem for sellers; at this pace, it would take about 11 months to work off the current housing inventory, according to the report.þþ“The large supply of homes on the market clearly favors buyers, and it should take several months to draw the inventory down,” Lawrence Yun, the Realtors’ chief economist, said in a statement. þþWhile the increase in home sales came in slightly ahead of economists’ expectations, a comparison with May 2007 reveals the extent of the damage done to the housing market. þþSales were down nearly 16 percent from a year ago, and condominium sales were off by 25 percent. Median prices were 6.3 percent lower than in May 2007.þþMr. Yun said that while foreclosures continue to hurt the market, sales in some distressed markets had improved. He cited Sacramento, the San Fernando Valley and Monterey County in California; Sarasota, Fla.; and Battle Creek, Mich.þþIn a separate report on Thursday, the government slightly raised its estimate for the nation’s economic activity in the first quarter. The growth in the gross domestic product was revised up to 1 percent, from a preliminary estimate of 0.9 percent, the Commerce Department said. The government originally estimated that the economy grew by a sluggish 0.6 percent. þþThe Labor Department said in a report Thursday that the number of new applications filed for unemployment benefits was unchanged last week, holding steady at 384,000.þþDespite the better-than-expected data, stock markets traded sharply lower Thursday after several prominent companies received downgrades from Wall Street analysts. Shares of Citigroup dropped 6 percent, and General Motors fell 11 percent after Goldman Sachs said the companies would face new problems in coming months. þþ
Source: NY Times
