Sales lag, price leads

September 26, 2002

NAR reports 1.7% dip in August sales, price still on the rise

Inman News Features

Sales of existing single-family homes slipped in August but remained historically strong, while prices continued to experience above-normal appreciation, according to the National Association of Realtors.

Existing-home sales dropped 1.7 percent in August to a seasonally adjusted annual rate of 5.28 million units from an upwardly revised level of 5.37 million units in July, reported NAR. Last month's sales activity was 3.8 percent below the 5.49-million unit pace in during the same month last year.

The national median existing-home price was $163,600 last month, up 6.4 percent compared with the same period a year ago when the median price was $153,700, according to NAR.

"The rate of home-price increases has been trending slowly downward, and we expect to return to a generally balanced market with normal price appreciation in 2003," said David Lereah, NAR's chief economist.

NAR President Martin Edwards Jr. said the good news is a continued decline in interest rates. "Mortgage interest rates have edged lower in the last couple of weeks, and we have to go back to the mid-1960s to see interest rates as low as they are today," he said. "The drop in mortgage interest rates is offsetting higher home prices, so housing affordability conditions are remaining fairly even."

Housing inventory levels at the end of August rose 4.8 percent from July to a total of 2.2 million existing homes available for sale, which represents a 5-month supply at the current sales pace, according to NAR, which generally considers a 6-month supply to represent a more balanced market between home buyers and sellers.

Regionally, home resale activity in the West rose 2.2 percent from July to an annual rate of 1.4 million units in August, but decreased 2.8 percent compared with August a year earlier, reported NAR. The median existing-home price in the West was $212,500, up 5.5 percent from the same month a year earlier.

Existing-home sales in the Northeast slipped 1.6 percent in August, compared with July, to a pace of 630,000 units, and slipped 7.4 percent compared with the same month last year, according to NAR. The median existing-home price in the Northeast was $169,000, up 9.7 percent from August a year earlier.

The existing-home sales pace in the South fell 1.8 percent in August, compared with July, to an annual rate of 2.13 million units, and were 4.1 percent below sales for the same month a year ago, reported NAR. The median price of an existing home in the South was $153,400, which was 6.8 percent higher than a year earlier.

In the Midwest, sales were down 5.9 percent from July to an annual rate of 1.12 million units, a 3.4 percent decrease compared with the same month last year, according to NAR. The median price in the Midwest was $142,900, up 6.6 percent from August last year.

Copyright: Inman News Service

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