Sales of existing homes fell in April, dropping to the lowest pace in almost four years. Home resales fell to a 5.99 million annual rate, a 2.6-percent decrease from March, reported the Wall Street Journal.
The median price for a previously owned home was $220,000 in April, down 0.8 percent from April 2006. The median price in March this year was $217,400.
Lawrence Yun, senior economist for the National Association of Realtors, said he anticipated slower demand because many subprime-loan products have gone dry. “In addition, increased scrutiny by lenders is stopping risky mortgage origination, which is good for both consumers and the lending community,” Yun stated.
The subprime mortgage market is expected to restrain sales going forward, according to the Wall Street Journal. The Federal Reserve’s quarterly survey of banks’ senior loan officers released earlier this month showed lenders constricted standards on subprime and nontraditional mortgages. Analysts predict tighter standards will lower the number of approved mortgages and keep sales weak.