No pick-up for US housing market

The US housing slump is taking its toll on economic growth

Sales of previously-owned US homes fell in April but not as much as had been feared, industry figures show.

The number of transactions during the month was 1% lower than in March to an annual rate of 4.89 million, said the National Association of Realtors (NER).

Down 17.5% on the year before, the estate agent group blamed more restrictive lending practices.

Earlier this week, the US Federal Reserve slashed its growth forecast, partly blaming the housing downturn.

The central bank now expects growth of between 0.3% and 1.2%, down from the 1.3% to 2% predicted in February.

Sales of previously-owned homes are closely watched because they account for 85% of all US house sales.

Silver lining?

The national median existing-home price for all housing types was $202,300 in April, which is 8% below a year ago when the median was $219,900.

Analysts predicted further price falls to come as a result of the increasing backlog of unsold homes.

The NER said inventory rose 10.5% to 4.55 million homes.

At current prices, that inventory would take 11.2 months to sale, which is the biggest backlog since the association began tracking family homes and apartments in 1999.

But Lawrence Yun, NAR chief economist, remained optimistic, highlighting recent changes to lending rules that will allow mortgage giants Freddie Mac and Fannie Mae to lend on a less conservative basis.

"I would encourage buyers who were disappointed by poor mortgage options to take another look at the market because the lending changes are significant," he said.