Nation's housing slump becomes even worse

By MARTIN CRUTSINGER
Associated Press

WASHINGTON — The slump in housing deepened in the final three months of last year, with sales falling in 40 states and median home prices dropping in nearly half the metropolitan areas surveyed.

Formerly red-hot areas were among the hardest hit as the five-year housing boom cooled considerably in 2006.

But in Texas, sales volume picked up at a rate of 6.1 percent in the fourth quarter compared to a year earlier. In the Houston area, the median used home price reached $148,600 in the fourth quarter, a 1.6 percent increase over the same period a year earlier.

In other economic news, industrial output fell in January by the largest amount in 17 months, reflecting huge cutbacks at auto factories and weakness in housing-related industries. The Federal Reserve reported Thursday that output at the nation's factories, mines and utilities was down 0.5 percent in January, the biggest setback since Hurricane Katrina disrupted activity in the fall of 2005.

And the number of newly laid-off workers filing claims for unemployment benefits jumped by 44,000 to 357,000 last week, the Labor Department said. It was the largest one-week increase since September 2005 after Hurricane Katrina. Part of the increase in jobless claims last week was due to a blast of cold in the Midwest and Northeast, which triggered higher layoffs in such industries as construction.

While some economists said they believed the worst may be over for housing nationwide, others predicted more price declines to come until near-record levels of unsold homes are reduced.

The National Association of Realtors said the states with the biggest declines in sales from October through December compared with the same period in 2005 were: Nevada, down 36.1 percent; Florida, down 30.8 percent; Arizona, down 26.9 percent; and California, down 21.3 percent.