Source : The Straits Times, Mar 25, 2008
FIRST INCREASE IN 7 MONTHS
WASHINGTON - SALES of existing homes in the United States rose unexpectedly last month for the first time in seven months, easing concerns that credit restrictions and falling prices would hurt demand.
Purchases increased 2.9 per cent to an annual rate of 5.03 million, the National Association of Realtors said yesterday. The median home price dropped 8.2 per cent from February last year, the most in four decades of record keeping.
'It looks like this may be a temporary pause,' said Global Insight chief US economist Nigel Gault. 'The price declines have helped, and people are still getting financing, though not on the good terms they could before. We're still a long way from a recovery in housing.' The housing market is unlikely to rebound quickly as a glut of houses on the market depresses property values and lenders toughen mortgage requirements even more to stem credit losses.
The Fed last week said the outlook had worsened and pledged that it will act to keep the US growing.
Stocks extended earlier gains after the report with the Dow Jones Industrial Average up 220.62 points at 12,581.94. Stocks also surged as JPMorgan Chase said that it would raise its offer for the investment bank Bear Stearns to US$10 from about US$2 previously. - BLOOMBERG NEWS
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