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Existing-Home Sales Still on a Roll in April

Sales of existing single-family homes rose last month and are at the fifth highest level of activity ever recorded, according to the National Association of Realtors®.

Existing-home sales rose 5.6 percent in April to a seasonally adjusted annual rate* of 5.84 million units from a level of 5.53 million units in March. Last month's sales activity was 3.2 percent above the 5.66-million unit pace in April 2002.

David Lereah, NAR's chief economist, said the indicators were up. "Consumer confidence rose following the swift action in Iraq, mortgage interest rates have been at record lows and new-home sales rose sharply in March," he said. "The favorable conditions in April caused existing-home sales to rise to their fifth-best showing ever – a pace that will be difficult to sustain but demonstrates that the housing sector will be close to a record this year."

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.81 percent in April, up slightly from 5.75 percent in March; it was 6.99 percent in April 2002.

"With the yield on the10-year Treasury note dropping to the lowest level since 1958, mortgage interest rates may decline to comparable lows," Lereah said.

NAR President Cathy Whatley, owner of Buck & Buck Inc. in Jacksonville, Fla., said interest rates have dropped in recent weeks. "During the first quarter, mortgage interest rates were at the lowest level since Freddie Mac started tracking them in 1971," she said. "Last week, it reported the 30-year fixed rate mortgage was at a new record low of 5.34 percent. This will continue to stimulate home sales and related industries in addition to refinance activity, which will help to boost the economy in the second half of the year."

The national median existing-home price was $163,400 in April, up 6.8 percent from April 2002 when the median price was $153,000. The median is a typical market price where half of the homes sold for more and half sold for less.

Housing inventory levels at the end of April rose 10.3 percent from March to a total of 2.47 million existing homes available for sale, which represents a 5.1-month supply at the current sales pace.

Regionally, the existing-home sales pace in the West jumped 9.6 percent from March to an annual rate of 1.60 million units in April, and was up 6.0 percent from April 2002. The median existing-home price in the West was $233,200, up 6.1 percent from the same month a year earlier.

Existing-home sales in the Northeast rose 4.8 percent in April to a pace of 660,000 units, but were 4.3 percent below a year ago. The median existing-home price in the Northeast was $178,700, up 14.3 percent from April 2002.

Home resale activity in the South increased 4.1 percent in April to an annual rate of 2.31 million units, and was 3.6 percent above April 2002. The median price of an existing home in the South was $152,400, which was 7.2 percent higher than a year ago.

In the Midwest, homes were reselling at an annual rate of 1.27 million units in April, 4.1 percent higher than March and 3.3 percent above the same month a year earlier. The median price in the Midwest was $135,900, up 5.0 percent from April 2002.

The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing approximately 880,000 members involved in all aspects of the residential and commercial real estate industries.

*The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns.

The next existing-home sales release is scheduled for June 25, at 10 a.m. EDT. The next national outlook release is scheduled for June 2.

Written by Walter Molony, Realtor.Org

5/27/2003


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