Existing-home sales fell a second month in a row during April, while inventories surged and prices dropped sharply from a year earlier. Home resales fell to a 4.89 million annual rate, a 1.0% decrease from March’s revised 4.94 million annual pace, the National Association of Realtors said Friday. Originally, the NAR estimated sales fell 2.0% to 4.93 million in March. The median home price was $202,300 in April, down 8.0% from $219,900 in April 2007. For short term overall, this data don’t show as much weakness as expected. The implications for the long term economy would seem to be fairly clear. As sales remain weak, additional homes come on the market from foreclosures while access to credit remains constricted, home values will continue to weaken and thereby create a negative wealth effect. The situation, especially taking the rising costs for food and energy in account, can only further threaten consumer spending going forward.
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