Existing home sales this year probably will fall to a five-year low, worse than forecast, signaling the U.S. housing market is far from hitting bottom.
New-home sales may decline 24 percent to a 10-year low of 804,000 and existing home sales will fall 11 percent, the National Association of Realtors said in a news release today. It was the 10th time this year the Chicago-based group lowered some part of its monthly housing and economic forecast.
Home resales tumbled to a five-year low in August as prices declined, subprime mortgage defaults soared and lenders such as Countrywide Financial Corp. raised standards even for borrowers with the best credit. Federal Reserve policy makers have said the housing market is ``exceptionally weak'' and some economists think the slump may push the U.S. into a recession.
``The credit tightening is knocking homebuyers out of a market that already was quite weak,'' said Brian Bethune, an economist at Global Insight Inc. in Lexington, Massachusetts.
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