The two-year U.S. housing slump showed no sign of abating in March as sales of previously owned homes fell for the seventh time in eight months.
Purchases dropped 2 percent, less than forecast, to an annual rate of 4.93 million, from 5.03 million in February, the National Association of Realtors said today in Washington. The median sales price declined 7.7 percent from a year earlier.
The jump in subprime defaults and credit-market losses has caused banks to demand higher down payments and increased income documentation for home loans. Record foreclosures are also depressing home values, giving buyers an incentive to hold off.
"The market will remain out of balance this year and most of next,'' said Michelle Meyer, an economist at Lehman Brothers Holdings Inc. in New York, which correctly forecast the sales level. "As long as the housing market remains weak we think the economy will remain weak as well.''