Existing home sales fall again, mortgages rates at new lows

August 18, 2011

City Room and The Associated Press

(Getty/Scott Olson)

Sales of exisiting homes fell for the third time in four months.

The National Association of Realtors says home sales fell 3.5 percent last month to a seasonally adjusted annual rate of 4.67 million homes. That's far below the 6 million that economists say must be sold to sustain a healthy housing market.

This year's pace is lagging behind last year's total sales. The 4.91 million sold last year were the weakest sales figures in 13 years.

Falling home prices have kept many people from selling their houses and taking new jobs in growing areas. They have also made people feel less wealthy and have reduced the consumer spending that drives about 70 percent of the U.S. economy.

Meanwhile, the average rate on a 30-year fixed mortgage is at its lowest level since 1971. Freddie Mac says the rate for the most popular mortgage has dipped to 4.15 percent from 4.32 percent a week ago. Its previous low of 4.17 percent was reached in November.

The average on the 15-year fixed mortgage has dipped to 3.36 percent, also a record. It's the third straight week of record-low rates for the popular refinancing option.

Still, low rates have yet to boost the depressed housing market, as many potential buyers can't afford to borrow.