October Existing-Home Sales Sustain Strength
November 24, 2004
WASHINGTON – Sales of existing single-family homes held steady last month, setting a pace that was the fourth highest on record, according to the National Association of Realtors®.
Existing-home sales slipped 0.1 percent in October to a seasonally adjusted annual rate* of 6.75 million units from an upwardly revised level of 6.76 million in September. Last month's sales activity was 5.6 percent above the 6.39-million unit pace in October 2003.
David Lereah, NAR's chief economist, said home sales continue to exceed expectations. "The ongoing stimulus of lower-than-expected mortgage interest rates was the primary driver of strong home sales in October," he said. "Of course all of the other market fundamentals remain sound, so we should only see a modest decline from record home sales this year if mortgage interest rates gradually rise."
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.72 percent in October, down from 5.75 percent in September; the rate was 5.95 percent in October 2003.
NAR President Al Mansell, CEO of Coldwell Banker Residential Brokerage in Salt Lake City, said the housing sector is poised for long-term health. "With a growing population, an improving economy and generally favorable housing affordability conditions, there is no end in sight to the current housing expansion," he said. "Although sales are likely to ease from record levels, they'll remain at a high threshold in years to come and continue to supply long-term gains."
The national median existing-home price was $187,000 in October, up 8.8 percent from October 2003 when the median price was $171,800. The median is a typical market price where half of the homes sold for more and half sold for less.
Housing inventory at the end of October improved slightly, rising 0.4 percent from September to a total of 2.40 million existing homes available for sale, which represents a 4.3-month supply at the current sales pace.
Regionally, the existing-home sales pace in the South rose 3.7 percent in October to an annual rate of 2.77 million units and was 7.7 percent above a year earlier. The median price of an existing home in the South was $169,200, which was 7.9 percent higher than October 2003.
Existing-home sales in the Northeast slipped 1.3 percent in October to a pace of 750,000 units, but were 1.4 percent above October 2003. The median existing-home price in the Northeast was $226,100, up 14.7 percent from a year ago.
In the Midwest, homes were reselling at an annual rate of 1.37 million units in October, down 2.8 percent from September, but were 0.7 percent above a year ago. The median price in the Midwest was $152,100, up 8.4 percent from October 2003.
Home resale activity in the West declined 3.6 percent from September to an annual rate of 1.86 million units in October, but was 9.4 percent above October 2003. The median existing-home price in the West was $272,300, up 14.4 percent from a year ago.
Soucre: The National Association of Realtors