The Wall Street Journal

WASHINGTON — Existing-home sales fell a second month in a row during April, while inventories surged and prices dropped sharply from a year earlier.

Home resales fell to a 4.89 million annual rate, a 1.0% decrease from March’s revised 4.94 million annual pace, the National Association of Realtors said Friday. Originally, the NAR estimated sales fell 2.0% to 4.93 million in March.

The median home price was $202,300 in April, down 8.0% from $219,900 in April 2007. The median price in March this year was $200,100. High inventories have exerted downward pressure on prices. The decline has kept would-be buyers from signing off on property as they wait for still-lower price tags.

Lenders have tightened their standards on home loans, contributing to the credit crunch that is restraining the U.S. economy. Those tighter standards have priced marginal buyers out of the market and made purchasing more difficult and costly for prime borrowers. The latest U.S. Federal Reserve study showed tighter standards on mortgage loans in early 2008. About 60% of banks indicated tightening standards on prime mortgages, the Fed’s April senior loan officer survey said. That was a larger fraction than in the previous, January survey by the Fed.

But the NAR said Friday there has been easing in mortgage restrictions. NAR economist Lawrence Yun advised buyers to take another look at the market because of the changes in lending.

Aside from tighter loan standards and prices falling under the weight of bloated inventories, a weakening job market hasn’t helped the housing market. The key nonfarm payrolls number in the government monthly report on employment has gone down four times in a row. In April, nonfarm payrolls receded by 20,000 jobs, the latest Labor Department data showed.

The April resales level of 4.89 million reported Friday by NAR was slightly above Wall Street expectations of a 4.86 million sales rate for previously owned homes.

The average 30-year mortgage rate was 5.92% in April, down from 5.97% in March, according to Freddie Mac.

Inventories of homes increased 10.5% at the end of April to 4.55 million available for sale, which represented an 11.2-month supply at the current sales pace. There was a 10.0-month supply at the end of March, revised from a previously estimated 9.9 months.

Regionally, existing-home sales in April fell 6.0% in the Midwest and 4.4% in the Northeast. Demand rose 6.4% in the West. Sales were unchanged in the South.