BAP Blog N.A.R. Reports Sales of previously occupied homes fell in Sept.

The number of Americans who bought previously occupied homes fell in September and home sales are on pace to match last year's dismal figures which was the worst in 13 years. As reported by The National Association of Realtors on Thursday home sales dropped 3 percent last month to a seasonally adjusted annual rate of 4.91 million homes. That is well below the 6 million that economists say is consistent with a healthy housing market. The recent housing market has been hobbled by foreclosures, weak demand and falling home prices. As reported, last years 4.91 million previously occupied homes sold was the lowest level since 1997. First-time home buyers accounted for 32 percent of all sales which was the same as August. First-time buyers are critical to a housing recovery because their purchases of low and moderately priced homes allow sellers to move up to more expensive homes. Homes at risk for foreclosure moved down to 30 percent of sales, from 31 percent in August. Many of the sales went to investors, who are buying homes under $100,000. Their purchases made up 19 percent of all sales last month, down slightly from 22 percent in August. With the large number of unsold homes and foreclosures on the market it is sending prices lower and hurting sales analysts are reporting. Many people are reluctant to purchase a home even with the lowest mortgage rates in history and that has a impact on sales figures. Many economists say home prices will keep falling, by at least 5 percent, through the rest of the year. Many forecasts don't anticipate a rebound in prices until at least 2013. With the high rate of foreclosures it has made re-sold homes much cheaper than new homes. The median sales price dropped nationwide to $165,400 in September from August. A new home is now roughly 30 percent higher than the price for a previously occupied home which is almost twice the normal markup. This trend is even affecting homes that are under contract and near closing as they are falling apart at the last minute. Contracts cancellations also remained high in September, with 18 percent of Realtors saying they had at least one contract scuttled. That's unchanged from August and a record high. Homes sales fell across most of the country. In the Northeast, sales rose 2.6 percent. But they declined 0.9 percent in the Midwest, 2.6 percent in the South and 8.8 percent in the West. The glut of unsold homes increased slightly in September to 3.48 million homes. At last month's sales pace, it would take 8.5 months to clear those homes. Analysts say a healthy supply can be cleared in six months.