WASHINGTON (Associated Press, Real Estate Center) - The nation's housing market cooled last year after a five-year boom, with sales of previously owned homes falling by the largest amount in 17 years.
The National Association of Realtors (NAR) said sales of existing homes totaled almost 6.5 million units for 2006, down 8.4 percent from 2005. The five-year boom that ended in 2005 drove prices up at double-digit rates and caused a stampede of investors who purchased houses hoping to quickly sell them for big profits.
Texas was an exception, experiencing a record year. According to Real Estate Center figures, almost 290,000 homes were sold in 2006.
David Lereah, NAR's chief economist, said 40 percent of national home sales in 2005 - the peak of the housing boom - were to investors and second-home buyers.
December sales were down almost 1 percent from November to an annual rate of 6.22 million units.
Even with the sales decline in 2006, the median price of a new home rose slightly last year to $222,000, compared with $219,600 in 2005.
Although the worst may be over, analysts say a rebound could be slow in coming because of a huge backlog of unsold homes that will keep downward pressure on prices, particularly in former boom areas.