(AFP) – May 23, 2008

WASHINGTON (AFP) — The troubled US housing sector saw little relief in April as sales declined and prices fell further, creating a record glut of homes for sale, an industry group said Friday.

Sales of existing homes, the largest segment of the housing market, fell one percent in April from March to a seasonally adjusted annual rate of 4.89 million units, the National Association of Realtors (NAR) said in a monthly update.

The sales pace was a tick stronger than analysts' consensus forecast of 4.85 million units.

The slide in home prices since the housing boom collapsed two years ago has worked against sellers as many would-be buyers face tightened credit and hesitate to jump into a market when home values are still declining.

Sales in March were upwardly revised a notch to a pace of 4.94 million homes, up from a prior estimate of 4.93 million.

On an annual basis, existing home sales were 17.5 percent below the 5.93 million units sold in April 2007.

"Over the past seven months, existing home sales have moved within a fairly narrow 4.89-5.06 million unit range. While this implies some stability in demand, the headwinds of tighter lending standards, falling employment and falling net worth suggest that a recovery in home sales in 2008 remains remote," said Gary Bigg, economist at Bank of America.

The median sales price in April for all categories of existing homes plunged eight percent from a year ago to 202,300 dollars. That was the second largest year-over-year decline.

In a worrying sign that the worst housing crisis in decades is far from over, inventories of homes for sale rose 10.5 percent to 4.55 million units, an 11.2-month supply at the current sales pace.

That is the highest level for combined single-family houses and condominiums/cooperatives since the NAR records began in 1995.

The backlog for condos was a record 14.2 months and that for single-family homes 10.7 months, the highest reading since June 1985.

"In today's market, the fence sitters outnumber the bargain hunters. Prices will have to drop further to turn this inequality around," said Patrick Newport of Global Insight,

"Our view is that with demand weak and credit tight, sales will fall another 10 percent before turning around late this year."

Contributing to the inventory glut are spiking home foreclosures, which hit a fresh all-time high in April, according to a survey released last week by the research firm RealtyTrac.

The NAR said that sales of single-family houses, which are less volatile than condos and considered a better market indicator by economists, slipped 0.5 percent, a decline of 16.1 percent from a year ago, while the median price fell slid 8.5 percent to 200,700 dollars.

Sales of condominiums and cooperatives fell 5.2 percent, down 27.9 percent from April 2007, and their median price dropped 3.7 percent to 214,900 dollars.

The snapshot on the US housing market was mixed, with sales on the upswing in the West, rising 6.4 percent, and steady in the South. Sales tumbled in the Midwest by 6.0 percent and in the Northeast by 4.4 percent.

Both the number of homes on the market and the median price usually rise in spring and the numbers are not seasonally adjusted.

NAR chief economist Lawrence Yun said current market conditions are creating "large distortions in the marketplace."

Sales activity in lower-priced areas has been higher than in areas with more expensive homes. That is because the lack of availability of so-called jumbo loans of greater than 417,000 dollars.

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