Existing-Home Sales Fell in April
As Subprime Lending Drops Off

Existing-home sales retreated in April, dropping to the lowest pace in nearly four years in another negative sign for the slumping housing sector.

Home resales fell to a 5.99 million annual rate, a 2.6% decrease from March's revised 6.15 million annual pace, the National Association of Realtors said Friday. March's rate was originally estimated at 6.12 million.

The median price for a home previously owned was $220,900 in April, down 0.8% from $222,600 in April 2006. The median price in March this year was $217,400.

NAR senior economist Lawrence Yun said he has anticipated slower demand because many subprime-loan products have dried up.

"In addition, increased scrutiny by lenders is stopping risky mortgage origination, which is good for both consumers and the lending community," Mr. Yun said.

The April resales level was below Wall Street expectations of a 6.18 million sales rate for previously owned homes. The 5.99-million pace was the lowest since 5.94 million in June 2003.

The subprime mortgage market mess is expected to restrain sales going forward. The Federal Reserve's latest quarterly survey of banks' senior loan officers, conducted in April and released last week, showed lenders tightened standards on subprime and nontraditional mortgages. Analysts expect tighter standards will lower the number of mortgages approved and keep sales depressed.

The average 30-year mortgage rate was 6.18% in April, up from 6.16% in March, according to Freddie Mac.

Inventories of previously owned homes rose 10.4% at the end of April to 4.20 million available for sale, which represented a 8.4-month supply at the current sales pace. There was a 7.4-month supply at the end of March, revised from a previously estimated 7.3 months.

Sales of existing homes dropped in all regions, down 0.7% in the Midwest, 8.8% in the Northeast, 1.7% in the West, and 1.2% in the South.

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