Home sales gear up for record year

August 27, 2002

NAR reports 4.5% month-over-month increase in July

Inman News Features

The market for existing single-family home sales rose in July while mortgage interest rates continued to decline, according to the National Association of Realtors.

Existing-home sales rose 4.5 percent to a seasonally adjusted annual rate of 5.33 million units in July from an upwardly revised pace of 5.1 million units in June, according to NAR. Last month's sales activity was 0.6 percent above the 5.3-million unit pace in July of last year.

"Mortgage interest rates were historically low in July. They're the lowest since Freddie Mac started tracking them in 1971, and looking at other sources we have to go back to 1967 to see interest rates as low as they are today," said David Lereah, NAR's chief economist. "Combined with other strong market fundamentals, this is keeping the housing market on track for another record year."

NAR projects 5.44 million existing-home sales this year, up 2.7 percent from last year's record. It also expects a record of 920,000 new-home sales this year, up1.2 percent from 2001.

The national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.49 percent in July, down from 6.65 percent in June, according to Freddie Mac; it was 7.13 percent in July a year ago.

NAR President Martin Edwards Jr. said a rebound was expected. "Home sales in June dipped more than expected following record activity at the beginning the year, which was spurred by exceptionally mild weather," he said. "Home sales should hold to a slower but more even course in the second half of the year."

The national median existing-home price was $162,800 in July, up 7.3 percent from the same month a year ago when the median price was $151,700, according to NAR. The median is the midpoint, which is a typical market price where half of the homes sold for more and half sold for less.

Housing inventory levels at the end of July dropped 9.3 percent from June to a total of 2.05 million existing homes available for sale, which represents a 4.6-month supply at the current sales pace, according to NAR; inventories are 2 percent higher than July of last year. "The number of homes on the market remains lean, which is supporting strong price gains," Lereah said.

Regionally, existing homes in the Midwest were selling at an annual rate of 1.19 million units in July, up 10.2 percent from June, according to NAR. The pace was 2.6 percent higher than July a year ago. The median price in the Midwest was $141,200, up 2.6 percent from a year ago.

The existing-home sales pace in the South rose 6.4 percent in July to an annual rate of 2.17 million units, and were 2.4 percent above a year ago, according to NAR. The median price of an existing home in the South was $153,100, a 9.3 percent increase over July a year ago.

Existing-home sales in the Northeast increased 4.9 percent in July to a pace of 640,000 units, according to NAR. The sales rate in this region was 3 percent below July of last year. The median existing-home price in the Northeast was $165,700, up 8.1 percent from a year ago.

Home resales in the West slipped 2.9 percent in July to an annual rate of 1.33 million units, and were 2.9 percent lower than a year earlier, said NAR. The median existing-home price in the West was $213,200, up 11.7 percent from July a year earlier.

Copyright: Inman News Service

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