Sales of existing homes fall by largest amount on record

WASHINGTON -- Sales of existing homes plunged by a record amount in September as turmoil in mortgage markets added more problems to a housing industry in its worst slump in 16 years.

The National Association of Realtors reported Wednesday that sales of existing homes fell 8 percent in September, the largest decline to show up in records dating to 1999. The seasonally adjusted annual sales rate of 5.04 million existing homes was also the slowest pace on record.

The weakness in sales translated into further pressure on prices. The median price -- the point at which half the homes sold for more and half for less -- fell to $211,700 in September, down by 4.2 percent from the sales price a year ago. It marked the 13th time out of the past 14 months that the year-over-year sales price has decreased.

The 8 percent decline in sales was bigger than the 4.5 percent decline that had been expected.

Analysts blamed the bigger-than-expected slump on the turmoil that hit credit markets and mortgage markets in August as worries increased over rising mortgage foreclosures.

The Illinois Association of Realtors reported Wednesday that while home prices in Illinois reported positive growth in September, sales were down. According to the association, the Illinois median home sale price in September was $200,000, up 0.8 percent from $198,500 in September 2006. The median is a typical market price where half the homes sold for more, half sold for less.

In Illinois, there were 10,476 total home sales, which include single-family homes and condominiums, in September 2007, 22.9 percent below September 2006, which logged 13,594 home sales. Year-to-date, sales were down 15.4 percent to 112,278 homes sold January through September 2007, compared to 132,784 homes sold during the same period last year.

The median home price for the Chicago area was $257,500 in September, up 5.1 percent from $245,000 in September 2006.