Existing home sales, prices fall in September

WASHINGTON - In further evidence of a sharp slowdown in the once-booming housing market, sales of existing homes fell for a sixth straight month in September and the median sales price dropped by a record amount.

The National Association of Realtors reported Wednesday that home sales fell by 1.9 percent in September to a seasonally adjusted annual rate of 6.18 million units, the slowest pace since January 2004.

The median price of a single-family home fell to $219,800 last month, a drop of 2.5 percent from the price in September 2005. That was the biggest year-over-year price decline in records going back nearly four decades. Home prices had also fallen in August and it marked the first back-to-back declines in 16 years.

The median price is the middle point, where half sell for more and half sell for less.

Housing, which had set sales records for both new and existing homes for five consecutive years, has been rapidly cooling this year, but economists with the Realtors suggested that the decline could be hitting bottom.

''The worst is behind us as far as a market correction - this is likely the trough for sales,'' said David Lereah, the Realtors' chief economist. ''When consumers recognize that home sales are stabilizing, we'll see the buyers who've been on the sidelines get back into the market.''

Other economists suggested the weakness in housing could last for a number of more months and perhaps as long as another year because of a huge backlog of unsold homes.

''The housing slowdown is just over a year old. It probably has another year to run,'' said Patrick Newport, U.S. economist at Global Insight. ''The market will probably not turn around until at least the second half of 2007.''

Newport predicted that existing home sales will fall by 9 percent this year and will drop by an even bigger 14 percent in 2007.