US home sales, prices fall in August

(WASHINGTON) A record decline in U.S. home prices in August attracted more buyers in some areas and led to a sizable decline in the number of unsold homes on the market, the National Association of Realtors said Wednesday.

The median sales price fell 9.5 percent to $203,100, the largest price decline on records dating to 1999. As prices fall, buyers are taking advantage of steep discounts, especially in hard-hit markets like California, Nevada and Florida.

"Time and price are the real cures for the housing market slump," said Mike Larson, an analyst at Weiss Research.

The inventory of unsold homes fell 7 percent to 4.3 million, down from the all-time record of 4.6 million in July. That's a 10.4-month supply at the current sales pace.

The decline, however, merits only "a small round of applause" because around five months of inventory is a more typical level, wrote Global Insight economist Patrick Newport. Also, many homeowners who don't have to sell are likely keeping their properties off the market. At the same time, thousands of foreclosed properties are tied up in court and are not for sale yet.

Lawrence Yun, the trade group's chief economist, said he hopes the downward trend in inventories continues because, "home prices will not stabilize as long as inventories remain high."