Sales of U.S. existing homes unexpectedly plunged in January to the lowest level in almost 12 years as pessimism about the economy increased and potential home buyers waited for President Barack Obama's plan to revive the housing market. Prices also fell to a six-year low amid the deep recession and rising unemployment. The National Association of Realtors (NAR) reported Wednesday that sales of existing homes fell 5.3 percent to an annual rate of 4.49 million units last month, from a 4.74 million pace in December. January's performance was the weakest since July 1997, and some analysts do not expect sales to hit bottom until later this year as home prices continue to fall. Sales had surged in December, providing some hope that the long-awaited housing-market bottom was in sight. Nationally, existing-home sales were down 7.6 percent from a year earlier in January. The west was the only part of the country to show increased sales, NAR said. The median national home price in January plunged 14.8 percent from a year earlier. It was the lowest price since March 2003 and the second-biggest drop on record, NAR reported. The number of unsold homes on the market fell nearly 3 percent last month to 3.6 million, the lowest inventory level in two years. But because of the weakening sales pace, it would still take 9.6 months to sell all of those properties, up from 9.4 months in December. NAR chief economist Lawrence Yun said about 40 percent of existing-home sales were “distress” transactions, where the mortgage company must erase some of the original loan amount in order to complete the sale. “We are seeing worsening economic conditions—loss of housing wealth and in the stock market,” he said. “Very low [consumer] confidence.” Few buyers are willing to take advantage of the lowest home prices in several years as most households are experiencing sharp declines in wealth.
