Sales of second hand United States homes fell 8.4% in March, the sharpest month-on-month drop for 18 years according to data from the National Association of Realtors released on Tuesday.
The latest figures showed an 11.3% fall in existing home sales, compared with a year ago. About 6.1 million existing homes were traded in March, the lowest figure since June 2003, while the average price of a house is now 217,000 US dollars, down 0.3% on 2006. The US housing market has stuttered badly in recent months with confidence hit by problems in the sub-prime (poor credit histories) mortgage market, with many lenders under severe pressure. The housing market is a vital barometer of the US economy and analysts remain worried that a sharp fall in the market, allied to weakness in manufacturing, could potentially trigger a recession. Policymakers have held US interest rates at 5.25% for the past six months, trying to balance fears of persistent inflation with the palpable signs of a slowdown in economic activity. The inventory of houses for sale in the market dropped 1.6% in March and stood at 3.75 million which is equivalent to 7.3 months supply.