Newspaper article THE JOURNAL RECORD

Nation's Existing-Home Sales Decrease

Newspaper article THE JOURNAL RECORD

Nation's Existing-Home Sales Decrease

Article excerpt

WASHINGTON (AP) -- Existing-home sales plunged in January to their lowest point in a year as consumers' worries about the economy outweighed the lure of cheaper mortgage rates. Forecasters suggested the economy will experience much slower growth this year than previously thought.

Federal Reserve Chairman Alan Greenspan has said a large determinant in whether the flagging economy slips into recession is how consumer confidence holds up during the slowdown.

Sales of previously occupied homes fell for a second straight month by 6.6 percent, the National Association of Realtors reported Monday. That pushed January's sales down to a seasonally adjusted annual rate of 4.6 million.

"This results from a decline in consumer confidence and the deteriorating economy," said David Lereah, the association's chief economist.

Consumer confidence fell for the fourth month in a row in January, hitting its lowest level in four years.

Economists also believed other factors, including stock market volatility, higher energy prices and slower job growth, added further drags to create January's decline in sales.

"Consumers are being cautious. I think they will postpone spending until there is a definitive understanding of the labor market situation. That is, until there is a clear understanding that their jobs are safe and sound," said Richard Yamarone, economist with Argus Research.

The 4.6 million existing-home sales rate was the lowest level since the January 2000 rate of 4.5 million rate.

Trying to keep the faltering economy afloat, the Federal Reserve slashed interest rates twice in January, totaling a full percentage point.

The National Association for Business Economics, in a survey released Monday, now said it expects this year's gross domestic product -- the output of goods and services produced within the United States -- to clock in at 2 percent, which would mark the weakest performance since 1991, when economic output declined by 0. …

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