Total State Existing-Home Sales Hit New Record In First Quarter, NAR
May 14, 2002
WASHINGTON -- Favorable housing affordability conditions, strong underlying demand, the improving economy and unusually good weather encouraged home buyers to get into the market and drive total state existing-home sales to a new record in the first quarter of 2002. Forty-six states and the District of Columbia posted increases from a year ago, according to the National Association of Realtors®.
NAR's latest report on sales of previously owned single-family homes, condominiums and co-operatives showed that total sales rose by double-digit rates in 26 states in the first quarter of this year compared to the same quarter in 2001. Only three states reported a decline in the annual rate of sales activity from a year ago, while one state was unchanged.
Nationwide, the seasonally adjusted annual rate* of total existing home sales reached a record of 6.54 million units in the first quarter, up 9.3 percent from the previous record of 6.11 million units in the first quarter of 2001. NAR started tracking the total state resale series in 1981.
NAR President Martin Edwards Jr. said sales are rising as a result of the strong entry-level demand from children of the baby boom, immigrants and minorities, as well as families wishing to trade up to a larger home. "When you combine favorable market conditions with this strong demographic demand, you create new housing records," he said. Edwards is a partner in Colliers Wilkinson & Snowden Inc., Memphis, Tenn.
David Lereah, NAR's chief economist, said that with mortgage interest rates hovering near record lows he expects the housing market to coast for the rest of the year. "The momentum of sales will push us into another annual record, even with a somewhat lower pace of home sales activity going forward," he said. "The economy is recovering, the job outlook is improving and interest rates will be fairly stable, increasing only modestly in the second half of the year."
According to Freddie Mac, the average commitment rate for a 30-year conventional fixed-rate mortgage was 6.97 percent in the first quarter, up slightly from 6.90 percent in the fourth quarter; it was 7.01 percent in the first quarter of 2001. Last week, it was reported at 6.79 percent.
The strongest year-to-year increase was in Mississippi, where the first quarter resale pace jumped 29.4 percent compared with the first quarter of 2001. Oklahoma rose 28.4 percent from a year ago, while New Mexico posted the third highest increase, up 27.7 percent from last year's first quarter rate.
Regionally, the West experienced the highest increase with an annual resale rate of 1.82 million units during the first quarter of 2002, up 10.8 percent compared to the same quarter a year ago. After New Mexico, the next highest increase in the region was in California, where existing-home sales rose 19.6 percent from a year ago. Montana resales were up 16.9 percent, while Wyoming's sales pace increased 14.4 percent from the first quarter of 2001.
The Midwest, with a 1.41 million-unit annual rate, recorded a 10.7 percent increase in existing-home sales for the first quarter compared with a year earlier. Kansas led the region with an increase of 20.5 percent in resales for the first quarter of 2001 compared to the same period a year ago. The next highest increase was in South Dakota, where the sales pace rose 19.6 percent from a year ago, followed by Michigan, up 18.5 percent, and Iowa, where the sales pace increased 17.7 percent from a year earlier.
In the Northeast, the total existing-home sales pace of 867,000 units in the first quarter rose 9.3 percent from a year ago. Leading the region was Maine, where resales jumped 23.0 percent from the first quarter of 2001. Vermont sales activity increased 21.4 percent in the last year, Massachusetts was up 20.5 percent and Connecticut rose 15.8 percent from the first quarter of 2001.
The South posted an existing-home sales rate of 2.45 million units in the first quarter, up 7.3 percent from a year ago. Following Mississippi and Oklahoma, the next strongest increase in the region was in Louisiana, where the resale pace was 22.0 percent higher than the first quarter of 2001. Arkansas was up 15.3 percent and Delaware rose 13.0 percent during the same time frame.
Source: The National Association of Realtors®