Existing Home Sales Plunge Most in Over Two Decades

Existing-home sales in the U.S. fell in December, capping a soft year that saw home purchase loan demand make its sharpest drop in 24 years.

Home resales fell to a 6.22 million annual rate, a 0.8% decrease from November’s revised 6.27 million annual pace, the National Association of Realtors said yesterday. November’s rate was originally estimated at 6.28 million.

Sales for all of 2006 dropped by 8.4% to 6.48 million - from a record 7.08 million in 2005. The drop was the sharpest in the housing market since 17.7% in 1982.

The median home price was $222,000 in December, compared with a revised $217,000 in November and an unrevised $222,000 in December 2005.

The decrease in resales interrupted back-to-back increases. Some analysts say declining prices and slow demand for home mortgage loans has discouraged some homeowners from selling.

The December resales level was below Wall Street expectations of a 6.25 million sales rate for previously owned homes.

The average 30-year mortgage rate was 6.14% last month, down from 6.24% in November, according to Freddie Mac. Inventories of homes fell 7.9% at the end of December to 3.51 million available for sale, which represented a 6.8-month supply at the current sales pace.