Home Sales Sink to 5-Year Low

Sales of previously owned US homes fell 4.3% in August, marking a 5-year low point and continuing the housing swoon growing out of the credit crisis. Although the drop was slightly less than expected, borrowing costs have risen and mortgage qualification has gotten harder, so demand is down and likely to continue falling, Bloomberg reports.

"The huge imbalance between demand and supply should put more downward pressure on home prices,'' said one economist. Sales were down 13% compared to a year ago, and the inventory of unsold homes stands at an unprecedented 10 months' worth. Some estimates foretell the current slump lasting until 2008; others indicate it might extend into 2009. (More housing sales stories.)