U.S. existing home sales rose 6.5 pct in December

Some good news for a change. Before the economy can begin to stabilize, the housing market needs to first. Although much of the increase in existing home sales can be attributed to foreclosure sales, any increase in sales is welcome. I am especially impressed with the decline in inventories. If mortgage rates can remain below 5 1/2% we may see the housing market begin to turn around in late 2009 or early 2010. When inflation begins to take hold, and believe me it will, housing will turn around hard as all tangible assets will be in demand.-Lou

U.S. existing home sales rose 6.5 pct in December

WASHINGTON, Jan 26 (Reuters) - The pace of sales of existing homes in the U.S. rose 6.5 percent in December, but the median home price dropped by a record 15.3 percent compared to the same period the year earlier, a National Association of Realtors report showed on Monday. Existing home sales increased to a 4.74 million unit annual rate from a downwardly revised 4.45 million units in November.

For the whole of 2008, existing home sales fell 13.1 percent to 4.91 million units, the lowest since 1997. The median national home price fell 15.3 percent from the year earlier to $175,400, the largest decline since the NAR started keeping records and probably the largest since the Great Depression, Lawrence Yun, NAR chief economist told reporters. Analysts polled by Reuters had expected existing home sales to set a 4.40 million unit pace in December.

The inventory of existing homes for sale fell 11.7 percent to 3.68 million units from 4.16 million in November, translating into 9.3 months of supply.