Existing-home sales at second-highest level on record
November 15, 2004
Arizona, West Virginia and North Carolina post major increases
The strongest year-to-year increase in existing-home sales activity for the third quarter was in Arizona, where the third-quarter resale pace was 20.3 percent above third-quarter 2003, the National Association of Realtors reported today. Next came West Virginia, which rose 17.9 percent from a year ago. North Carolina posted the third-strongest increase, up 17.5 percent from last year's third-quarter rate.
Meanwhile, total existing-home sales dropped 11.3 percent from third-quarter 2003 to third-quarter 2004, and dropped 7.2 percent in Michigan, 5.6 percent in Washington, D.C., 3.6 percent in Louisiana, and 3.5 percent in California and North Dakota. A year-over-year third-quarter drop in the number of existing-home sales was also reported in Florida, Hawaii, Idaho, Indiana, Minnesota and Missouri.
Total state existing-home sales activity in the third quarter was at the second-highest pace on record, with 36 states posting increases from a year ago, the association reported.
The NAR survey showed that nationwide, the seasonally adjusted annual rate of existing single-family, apartment condominium and co-operative home sales totaled 7.66 million units in the third quarter of this year, up 4.1 percent from a 7.36 million-unit pace in the third quarter of 2003. The record was a level of 7.80 million units in the second quarter of this year; NAR began tracking state home sales in 1981. The seasonally adjusted rate projects the results from a single quarter over an entire year.
Total sales rose by double-digit rates in 10 states in the third quarter compared to the same quarter in 2003 – complete data for two states was not available.
David Lereah, chief economist for the association, said home sales will easily set a record this year. "The last six months is the strongest stretch of home sales ever recorded," he said. "Low mortgage interest rates are a big factor, but even more important is the fundamental demand from a growing number of households in an environment of job growth and economic improvement."
According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage was 5.89 percent in the third quarter, down from 6.13 percent in the second quarter; the rate was 6.01 percent in the third quarter of 2003.
Al Mansell, association president and CEO of Coldwell Banker Residential Brokerage in Salt Lake City, said strong sales to first-time buyers are providing liquidity to the housing market. "Four out of 10 home purchases are by first-time buyers, providing a ready market for sellers and making it easier for them to buy another home," he said. "The positive market fundamentals mean we're in the midst of a housing expansion that will be driven by demographics going forward. Homeownership will continue to be the soundest investment most families will ever make."
Regionally, the best performance was in the South, which recorded a sales rate of 3.16 million units in the third quarter, up 5.6 percent from a year ago. After West Virginia and North Carolina, the strongest increase in the region was in Tennessee where the resale pace was 15.5 percent higher than the third quarter of 2003. Georgia experienced a 12.3 percent gain, while Virginia was up 9.4 percent during the same time frame.
In the West, the resale rate of 2.11 million units rose 5.3percent from the third quarter of 2003. After Arizona, the next highest increase was in Wyoming where total existing-home sales rose 13.7 percent from a year ago. Nevada experienced an 11.6 increase from the third quarter of 2003, while Oregon was up 11.5 percent and New Mexico rose 10.4 percent.
In the Northeast, the total existing-home sales pace of 905,000 units in the third quarter increased 3.9 percent from a year ago. Massachusetts's sales activity rose 10.6 percent, Pennsylvania increased 7.6 percent and New Jersey was up 5.2 percent from a year ago.
In the Midwest, the 1.49 million-unit annual rate was 0.5 percent below the third quarter of 2003. Iowa led the region with an increase of 5.7 percent compared to the same period a year ago. Next was Illinois, where existing-home sales rose by 2.8 percent, followed by South Dakota, which increased 2.4 percent from the third quarter of 2003.
Copyright 2004 Inman News
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