WASHINGTON (March 25, 2004) – Sales of existing single-family homes rose last month, marking only the eighth month on record that the sales pace has reached or exceeded the 6 million mark, according to the National Association of Realtors.
Existing-home sales increased 2.0 percent in February to a seasonally adjusted annual rate* of 6.12 million units from a downwardly revised pace of 6.00 million units in January. Last month's sales activity was 5.7 percent above the 5.79-million unit pace in February 2003.
David Lereah, NAR's chief economist, said the housing market could defy expectations this year. "Currently, we are projecting that home sales will decline slightly, but they remain at exceptionally high levels," Lereah said. "With a strong underlying demand for housing from a growing population in a recovering economy, we could be flirting with another record this year."
NAR President Walt McDonald, broker-owner of Walt McDonald Real Estate in Riverside, Calif., said low interest rates remain a huge factor in strong home sales. "Last month's average mortgage interest rate was the fourth lowest on record since Freddie Mac started tracking them in 1971," he said. "Historically low mortgage interest rates are expected to dominate again this year, which will help to keep home sales very close to last year's record."
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.64 percent in February, down from 5.71 percent in January; it was 5.84 percent in February 2003. The record low was 5.23 percent in June 2003.
The national median existing-home price was $168,100 in February, up 5.7 percent from February 2003 when the median price was $159,000. The median is a typical market price where half of the homes sold for more and half sold for less.
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Housing inventory levels rose 5.9 percent at the end of February with 2.33 million existing homes available for sale, which represents a 4.6-month supply at the current sales pace. In January there was a 4.4-month supply of homes on the market.
Regionally, existing-home sales in the Northeast jumped 14.3 percent in February to a pace of 720,000 units, and were 7.5 percent above February 2003. The median existing-home price in the Northeast was $204,900, up 15.4 percent from a year ago.
Homes in the Midwest were reselling at an annual rate of 1.27 million units in February, up 7.6 percent from January, but were 0.8 percent below February 2003. The median price in the Midwest was $137,000, up 2.3 percent from a year earlier.
Home resales in the West rose 3.1 percent from January to an annual rate of 1.64 million units in February, and were 5.8 percent above a year ago. The median existing-home price in the West was $237,200, up 9.6 percent from February 2003.
The existing-home sales pace in the South dropped 4.2 percent in February to an annual rate of 2.49 million units, but was 8.7 percent above February 2003. The median price of an existing home in the South was $153,400, which was 2.8 percent higher than a year earlier.
The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing one million members, including NAR's institutes, societies and councils, involved in all aspects of the residential and commercial real estate industries.
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*The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns.
Existing-home sales, which are based on transaction closings, differ from the U.S. Census Bureau's series on new-home sales, which are based on contracts or the acceptance of a deposit. In the count of new-home sales, the house can be in any stage of construction ranging from not started to fully complete. The count of existing-home sales is based on completed transactions in which the home usually is ready for occupancy. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample and typically are not subject to large prior-month revisions that are fairly common in the new-home sales series.
The next existing-home sales release is scheduled for April 27, at . The next national outlook release is scheduled for April 6.
Information about NAR is available at http://realtor.org. This and other news releases are posted in the Web site's "News Media" section under NAR News Releases. Statistical data, charts and surveys may be found at http://realtor.org/research.
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