Home sales slip, stock of unsold homes rises

By Joanne Morrison

WASHINGTON (Reuters) - Sales of previously owned U.S. homes slipped last month and the backlog of unsold properties hit a record high, according to data on Friday that suggested the market's downturn still has a long way to run.

Home resales fell 1 percent in April to a 4.89 million-unit annual rate, the National Association of Realtors said.

The sales pace was a bit better than expected on Wall Street, but the stock of unsold homes surged 10.5 percent to 4.55 million units, leading economists to warn of further housing market woes ahead.

At April's sales pace, the supply of homes was 11.2 months' worth, the highest since the trade group began tracking single-family and condo properties together in 1999. For single units, the supply was 10.7 months' worth, the most in 23 years.

"The increase in unsold inventory suggests that the housing downturn will continue on through this year and well into next," said Moody's Economy.com Chief Economist Mark Zandi.

Stocks initially got a slight lift from the data, but later turned lower as the market digested the news and warily eyed a resumption in the steep run-up in oil prices. The blue chip Dow Jones industrial average .DJI closed down nearly 146 points, or 1.1 percent.

Prices of U.S. government bonds rose as investors shifted out of stocks, while the dollar fell and oil climbed above $131 a barrel.

The report showed the median home price in April was down 8 percent from a year ago, at $202,300. It was the second-largest price decline on record, following the biggest drop in February.