'Serious correction' under way in US housing market
By Rupert Cornwell in Washington
Published: 26 September 2006

All signs pointed downwards for the US housing market yesterday after new figures showing that prices for existing homes declined in August for the first time in 11 years, while sales dropped to the lowest level in two and a half years.

According to the National Association of Realtors, the median price fell 1.7 per cent last month to $225,000 (£118,000), while sales of existing homes dipped 0.5 per cent to an annual rate of 6.3 million. At the same time, ever more owners are being forced to put properties on the market as mortgage rates have steadily risen, further dimming prospects of an improvement in the short term. The total of existing homes on the market is now the highest since April 1993.

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