Washington, DC, August 15--Total existing-home sales, which include single-family and condos, were at the highest pace on record in the second quarter, with 42 states showing higher sales in comparison with a year earlier, according to the National Association of Realtors.
NAR’s latest report on total existing-home sales shows that the national seasonally adjusted annual rate was 7.22 million units in the second quarter, up 4.6 percent from the previous record of 6.90 million in the second quarter of 2004.
The strongest increase was in West Virginia, where the second-quarter level of sales activity rose 21.7 percent compared with the second quarter of 2004. Washington existing-home sales increased 19.8 percent from a year earlier, and Vermont was up by 19.6 percent. At the same time, seven other states recorded double-digit increases. Five states and the District of Columbia posted declines but remained historically strong, one was unchanged and complete data was not available for two states.
David Lereah, NAR’s chief economist, said home sales are stimulating the U.S. economy. "Record home sales are creating high demand for related goods and services, and they’re creating new jobs," he said. "In fact, the overall housing sector accounts for about a quarter of total economic activity. In addition, the growth in housing wealth is feeding into consumer spending, which is helping other segments of the economy."
NAR president Al Mansell of Salt Lake City said favorable market conditions are supporting a strong underlying demand for homes. "Historically low mortgage interest rates and improving labor markets are giving our growing population the opportunity to make the transition from renting to owning," he said. "History tells us that housing is the best long-term investment a family can make, with home equity accounting for the largest share of household wealth."
According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage was 5.72 percent in the second quarter, down from 5.76 percent in the first quarter; it was 6.13 percent in the second quarter of 2004.
Regionally, the Northeast reported the strongest annual increase, where the second quarter existing-home sales rate of 1.21 million units rose 7.5 percent from the second quarter of 2004. After Vermont, Connecticut experienced the strongest increase in the region with sales activity 14.7 percent above a year ago, while New York resales increased 6.8 percent.
The South recorded an existing-home sales pace of 2.73 million units in the second quarter, up 6.3 percent from a year earlier. After West Virginia, the strongest increase in the South was in Arkansas, up 15.8 percent from the second quarter of 2004, followed by South Carolina, where existing-home sales rose 14.4 percent, and Alabama, which increased 14.0 percent.
In the West, existing home sales rose 1.8 percent to 1.66 million units in the second quarter from the same period in 2004. After Washington, the next highest increase in the region was in Montana, where total existing-home sales rose 13.9 percent compared with a year earlier; Wyoming sales activity was up by 13.7 percent, while Utah increased 9.7 percent.
In the Midwest, total existing-home sales in the second quarter increased 1.6 percent to a 1.62 million-unit annual pace in comparison with a year ago. North Dakota led the region, up 7.5 percent from the second quarter of last year, followed by Iowa, posting a 6.2 percent gain, and Indiana, with an increase of 6.1 percent.
