Washington, Sept. 25--Sales of existing single-family homes set a second consecutive monthly record in August on the heels of record-low interest rates in June, according to the National Association of Realtors.
Existing-home sales rose 5.5 percent in August to a seasonally adjusted annual rate* of 6.47 million units from an upwardly revised level of 6.13 million units in July. Last month's sales activity was 21.8 percent above the 5.31-million unit pace in August 2002.
David Lereah, NAR's chief economist, said the two-month surge indicates the top of the housing market's historic run. "Some of the home sales closed in August were negotiated in June when mortgage interest rates hit record lows," he said. "Much of the remaining portion of sales reflect quick decisions to make offers in July when interest rates began to rise sharply. The good news is that mortgage interest rates have declined over the last couple weeks."
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.26 percent in August, up from 5.63 percent in July; it was 6.29 percent in August 2002. Freddie Mac's series began in 1971; the record low was 5.23 percent in June 2003.
NAR President Cathy Whatley, owner of Buck & Buck Inc. in Jacksonville, Fla., said the swing in mortgage interest rates has been somewhat of a surprise this year. "Mortgage interest rates have been lower than projected for most of 2003, but the 30-year fixed rate should hover between 6.0 and 6.5 percent for the rest of the year," she said. "We expect home sales to moderate but remain historically strong in the coming months."
The national median existing-home price was $177,500 in August, up 9.8 percent from August 2002 when the median price was $161,700. 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 August rose 4.2 percent from July to a total of 2.46 million existing homes available for sale, which represents a 4.6-month supply at the current sales pace.
Regionally, home resale activity in the West rose 8.0 percent from July to a record annual rate of 1.76 million units in August and was 24.8 percent above August 2002.
The median existing-home price in the West was $241,600, up 11.7 percent from the same month a year earlier.
The existing-home sales pace in the South increased 6.5 percent in August to a record annual rate of 2.62 million units, and was 22.4 percent higher than a year ago. The median price of an existing home in the South was $165,300, which was 9.4 percent higher than a year earlier.
In the Midwest, homes were reselling at a record annual rate of 1.38 million units in August, up 3.0 percent from July and 22.1 percent above August 2002. The median price in the Midwest was $150,100, up 8.4 percent from a year ago.
Existing-home sales in the Northeast rose 1.4 percent in August to a record pace of 710,000 units; the sales rate was 12.7 percent higher than a year ago. The median existing-home price in the Northeast was $196,400, up 15.4 percent from August 2002.
