A key survey published today pointed to further trouble in the US housing sector.
Sales of existing homes fell 0.2% to 5.75 million units in the year, the lowest since November 2002, said the National Association of Realtors (NAR).
Total existing home sales, which include apartments, fell 0.2% in July from an upwardly revised 5.76 million seasonally adjusted annual rate in June, first reported as 5.75 million.
Chief economist at the estate agent association, economist Lawrence Yun, said the market is holding on despite temporary mortgage disruptions from fallout in the subprime market and rising foreclosures.
But the stock of homes for sale rose 5.1% to 4.59 million, the highest on record since the association began tracking both single-family and apartment sales together in 1999.
'This shows that the housing downturn continues to intensify. It shows no signs of abating,' said Mark Zandi, chief economist at Moodys.
'Given the turmoil in the financial market from lending problems, the housing problem will continue in the months ahead,' he added.
Meanwhile, the risk of massive defaults on sub-prime mortgages and heavy debts now poses a bigger threat to US economic prosperity than terrorism, a panel of US business economists believes.
'The combined threat of sub-prime loan defaults and excessive indebtedness has supplanted terrorism and the Middle East as the biggest short-term threat to the US economy,' the National Association for Business Economics said today.
The conclusion was based on a survey of 258 NABE members conducted between July 24 and August 14 and updates one done in March. Only 20% of members said terrorism was now their top concern, compared with 35% in March.
18% of those surveyed pointed to the effects of the sub-prime debacle as their biggest concern, and the related issue of 'excessive household and corporate debt' was cited by another 14%.
While about 60% of NABE members approved regulators' moves to tighten mortgage lending rules, more than 90% considered they were 'too late' in doing so.
