NEW YORK -- The U.S. housing market showed more frailty in the third quarter, when home sales plummeted in 38 states, hitting Nevada, Arizona, Florida and California particularly hard, government data showed Monday.
The once-booming real estate market's persistent weakness over the past year has reined in expectations for economic growth but hasn't been severe enough to offset a rising stock market, lower gasoline prices and improved consumer expectations.
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The National Association of Realtors reported Monday that sales of existing homes fell in 38 states during the summer. Sales retreated to a seasonally adjusted annual rate of 6.27 million units nationwide, down by 12.7 percent from the same period a year ago. Nevada, Arizona, Florida and California led the declines.
Home prices also dropped: The realtors' survey showed that the midpoint price for an existing home sold during the summer dipped 1.2 percent year over year to $224,900. Some 45 metropolitan areas saw home prices decline.
Earlier this month, the Greater Las Vegas Association of Realtors reported 1,689 single-family home sales in October, down 34.4 percent from the same month a year ago. It was the 10th straight month of double-digit, year-over-year sales declines.
"It's an absolute correction," association President Linda Rheinberger said. "We needed to have this. What's interesting is prices are fairly flat. But we absolutely needed a correction and across the country; it's helped with affordability. We have an affordability issue here in the county we're going to have to deal with."
Meanwhile, the latest report of building permits showed the slowest pace of annual growth in nine years in October. Housing construction slid sharply as builders tried to curb swelling inventories of unsold new and existing homes.
In Las Vegas, new home builders pulled 864 permits in October, the lowest total since January 1993, Home Builders Research reported.
"We never thought the monthly permit total would ever again get below 1,000," Home Builders Research President Dennis Smith said.
"It demonstrates how the market should work. Demand softens, therefore builders produce fewer homes," Smith added.
A closely watched indicator of future economic activity release Monday provided further evidence of that trend.
The Conference Board, an industry-backed research group based in New York, reported Monday that its Index of Leading Economic Indicators rose 0.2 percent in October. Increased real money supply and improved consumer expectations helped offset the sharp decline in housing permits and weaker vendor performance.
"The economy is growing more slowly, but we have yet to have weakness spread beyond housing and motor vehicles to such a degree that we need to fear the proximity of a hard landing," said John Lonski, chief economist of Moody's Investor Service, referring to when the economy turns from growth to a recession.
The housing market slowdown has weighed on the leading indicators index this year. But all told, strengths and weaknesses in the leading indicators have been roughly balanced, according to the Conference Board report.
