The U.S. housing industry slid deeper into recession last month as the August credit-market rout made it harder for buyers to obtain loans.
Sales of previously owned homes fell 8 percent in September to an annual rate of 5.04 million, the fewest since records began in 1999, the National Association of Realtors said in Washington. The decline was almost twice as steep as economists forecast, while the median price dropped the most in almost a year.
Traders added to bets that the Federal Reserve will be forced to cut interest rates again next week to prevent the two- year real-estate slump from bringing the expansion to an end. Stocks retreated and Treasury notes climbed.
``The worst isn't behind us, the worst is here right now,'' said Jonathan Basile, an economist at Credit Suisse Holdings in New York. ``Housing is going to be a significant drag on the third quarter and fourth quarter.''
Economists had forecast resales to fall 4.5 percent to an annual rate of 5.25 million from a previously reported 5.5 million pace in August, according to the median estimate of 76 economists in a Bloomberg News survey. The previous month's sales were revised to 5.48 million.
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