US house sales fell for the eighth consecutive month in October as bargains hunters waited for prices to slide further and the number of houses for sale rose to the highest levels since 1985.

Sales of existing homes fell 1.2 per cent in October compared to the previous month to an annual rate of 4.97 million, according to the National Association of Realtors.

The figures, which were worse than economists’ forecast, mean sales in October were down more than 20 per cent on the same month a year earlier.

Meanwhile, the national median home price fell to $207,800, down 5.1 per cent from prices a year ago and the largest annual drop recorded.

Dimitry Fleming an analyst at ING, said: “Falling home prices will keep buyers on the sideline waiting for the "right" moment to step back in. With price declines still accelerating, this waiting game could last well into 2008.”

He added: “Cheaper homes, easier access to credit and lower borrowing costs are the recipe for a recovery in housing demand. Unfortunately, current market conditions are miles away from this magic cocktail.”

The decline in sales was exclusively due to a drop in sales of condominiums and apartments. Single family home sales were unchanged following an 8.8 per cent plunge in September.

Capital Economics, the analysts, said: “Conditions are still getting worse in the housing market.”

It added: “House prices are already falling and the evidence from today's report is that the downward pressure on prices is only getting more intense.”

Explore Economics

• Pre-Budget Report 2008

• Budget 2009

• World Economic Forum

• The Times MPC

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts