US home sales still on the slide

First time buyers are staying away from the US property market.

The number of homes sold in the US fell 15.5% in June compared with the same month last year, as the US housing market continued its slump.

Analysts said the figures from the National Association of Realtors (NAR) suggested the housing market had not yet found a bottom.

The NAR said forced sales such as foreclosures made up a third of sales.

The data raised fears about the health of the US economy and sent US shares sharply lower.

On Wall Street, the blue-chip Dow Jones industrial average slid 2.43% to end at 11,349 points.

Regional variations

The NAR said that a key reason for the decline in sales was a lack of first-time buyers.

The figures also showed regional variations with existing homes sales falling in the South, the Mid-west and North-east, but still rising in the West, where the population is growing the fastest.

Sales were down 2.6% on a month-to-month comparison.

The figures also showed that the median price of existing homes was $215,000 in June, down 6.1% from June 2007.

Other house price indexes have suggested that falls in major metropolitan areas may be closer to 15%.

Paul Ashworth, senior US economist at Capital Economics said that even when sales begin to recover, the excess supply of unsold homes sitting on the market will continue to put downward pressure on house prices for some time

"Most worryingly, the anecdotal evidence suggests that the only reason sales aren't falling at a faster pace is down to the unprecedented surge in sales of foreclosed homes," he said.