Total State Existing Home Sales Set Record in 2nd Quarter
August 1, 2004
WASHINGTON – Strong housing market fundamentals propelled total existing-home sales to the highest pace on record in the second quarter, according to the National Association of Realtors®.
Sales rose by double-digit rates in 34 states and the District of Columbia compared to the same quarter in 2003 and no state recorded a decline. Complete data for two states was not available.
The NAR survey showed that nationwide, the seasonally adjusted annual rate* of existing single-family, apartment condominium and co-operative home sales totaled 7.79 million units in the second quarter, up 16.0 percent from the 6.72 million-unit pace in the second quarter of 2003. The previous record was a sales rate of 7.36 million in the third quarter of 2003.
David Lereah, NAR's chief economist, said low mortgage interest rates are only part of the picture. "Technology streamlining in mortgage origination has reduced costs in recent years through increased efficiencies," he said. "Combine that with low interest rates and a strong demand from both the growing and aging segments of the population, along with rising consumer confidence in an improving economy, and you have both the wherewithal and the need to create a record housing market."
According to Freddie Mac, the national average commitment rate for a 30-year conventional fixed-rate mortgage was 6.13 percent in the second quarter, up from 5.60 percent in the first quarter; the rate was 5.51 percent in the second quarter of 2003 – the lowest quarterly average since the series began in 1971.
NAR President Walt McDonald, broker-owner of Walt McDonald Real Estate in Riverside, Calif., said favorable market conditions are expected to continue. "Mortgage interest rates have come back down to the 6.0-percent range over the last few weeks," he said. "Although mortgage rates will trend gradually upward, they will remain historically low. What won't change is the demographic demand from more people entering the years in which they typically buy a first home, which is freeing existing owners to make another purchase and keep home sales at a higher plateau than we saw in the beginning of this decade."
The strongest year-to-year increase was in Nevada, where the second quarter resale pace rose 32.5 percent over the second quarter of 2003. Next came Idaho, which rose 31.0 percent from a year ago. Arizona posted the third highest increase, up 25.1 percent from last year's second quarter rate.
Regionally, the West experienced the strongest increase with sales activity in the second quarter at a record annual rate of 2.17 million units, up 19.8 percent from a year ago. After Nevada, Idaho and Arizona, the next highest increase was in Colorado, where existing-home sales rose 23.5 percent; Oregon resales were up 21.8 percent from the second quarter of 2003.
The South, with a record resale rate of 3.17 million units, posted a 17.5 percent rise for the second quarter of 2004 compared with the same quarter a year ago. The strongest increase was in North Carolina, where the resale pace was 24.8 percent higher than the second quarter of 2003. South Carolina was up 23.5 percent, while Florida rose 22.8 percent in the last year.
In the Northeast, total existing-home sales jumped 12.6 percent to a record pace of 903,000 units in the second quarter from the same period a year ago. Leading the region was Connecticut, where existing-home sales rose 23.3 percent from the second quarter of 2003. At the same time, both Massachusetts and New Jersey increased 22.5 percent while Maine was up 20.3 percent.
In the Midwest, total existing-home sales increased 10.1 percent to a record annual pace of 1.54 million units compared with the second quarter of 2003. The strongest increase in the region was in North Dakota, with a gain of 19.8 percent in resale activity over the same period in 2003, followed by Kansas with a rise of 15.2 percent and Minnesota, which increased 13.8 percent.
The National Association of Realtors