4TH Quarter Total Existing-Home Sales Rise In 40 States, NAR reports
February 12, 2002
WASHINGTON ? Total existing-home sales, which include single-family, apartment condominium and co-operative sales, rose in 40 states in the fourth quarter of 2001 compared with the same period in 2000, while one state ? Delaware ? was unchanged, the National Association of Realtors reported today. Sales declined in only nine states and the District of Columbia.
NAR's latest report on total existing-home sales showed that nationwide, the seasonally adjusted annual rate* was 5.92 million units in the fourth quarter, up 2.6 percent from the 5.77 million-unit level in the fourth quarter of 2000. However, fourth-quarter sales were off 1.0 percent from a pace of 5.98 million units recorded in the third quarter.
The strongest annual increase was in New Mexico, where the fourth quarter resale pace rose 24.2 percent compared with the fourth quarter of 2000. Idaho existing-home sales rose 19.2 percent from a year earlier, while West Virginia posted the third highest increase, up 18.2 percent.
NAR President Martin Edwards Jr. said the report demonstrates the importance of achieving the American Dream of homeownership. "With both new- and existing-home sales setting records in 2001, homeownership also is in record territory with 68 percent of American households owning their own homes. However, it's important to keep this dream alive for all segments of our society, and that's why we applaud President Bush's plan that includes a community homeownership tax credit in the 2003 budget," he said. "The tax credit will help bridge the gap between the cost of developing affordable housing and the price at which these homes can be sold in many lower-income neighborhoods. Also, enhancing loan programs such as those insured by FHA and VA will help to expand housing opportunities for all rungs of the housing ladder."
David Lereah, NAR's chief economist, pointed to low interest rates as the most significant factor in the strong state home sales report. "Mortgage interest rates in the fourth quarter were almost a percentage point below the same period in 2000. Combine that with a growing number of households who have the desire and means to afford housing and strong home sales are a fairly reasonable result," he said.
According to Freddie Mac, the average commitment rate for a 30-year conventional fixed-rate mortgage was 6.78 percent in the fourth quarter, down from 6.97 percent in the third quarter; it was 7.64 percent in the fourth quarter of 2000.
Lereah said that the nine states and the District of Columbia posting sales declines are in generally good shape. "Most of the declines were minor, with sales activity remaining at fairly high levels," said Lereah. "In some cases sales are down compared to a surge of activity a year earlier, and inventory shortfalls may be slowing sales in some areas. It's not unusual for markets to take a breather after a sustained period of high home sales. At the other end of the spectrum, 13 states experienced double-digit increases in sales activity from the fourth quarter of 2000."
Regionally, the Midwest reported the strongest increase in total existing-home sales for the fourth quarter of 2001 from the same period a year earlier. It recorded a 1.22 million-unit annual sales rate, up 6.7 percent compared with the fourth quarter of 2000. South Dakota led the region, up 14.8 percent from the fourth quarter a year earlier. North Dakota ranked second, posting a 14.7 percent increase, followed by Kansas, with a gain of 12.6 percent compared with the same quarter in 2000.
In the South, the resale pace of 2.44 million units in the fourth quarter rose 3.7 percent from the same quarter in 2000. After West Virginia, the second-strongest state was Oklahoma, up 17.6 percent in the fourth quarter of 2001 from the same quarter a year earlier; Arkansas resales rose 16.0 percent in the same time frame. Alabama and Mississippi also recorded double-digit increases in home resales from a year ago.
The Northeast recorded a total existing-home sales rate of 750,000 units in the fourth quarter of 2001, up 1.4 percent from a year earlier. Rhode Island posted the strongest increase in the region with sales activity 4.2 percent above a year ago. New York resales were up 4.1 percent in the same time frame, while Connecticut existing-home sales increased 2.6 percent from the fourth quarter of 2000.
The West, with an annual resale pace of 1.51 million units, posted a 1.4 percent decline for the fourth quarter of 2001 compared to the same quarter the previous year. After New Mexico and Idaho, the next highest increase in the region was in Alaska, where total existing-home sales rose 17.7 percent compared to the fourth quarter of 2000. Utah resales rose 13.1 percent in the same time frame, while Montana was up 10.8 percent.
Tables of state resale rates, percent changes and historic data are available athttp://realtor.org/research.nsf ? click on Existing Home sales, select again and click on Quarterly Data.
Source: National Realtors Association