Washington, DC, Dec. 27--The market for existing single family home sales slipped from near record levels in November but are on track for a record year, according to the National Association of Realtors.
Existing home sales declined 3.5% to a seasonally adjusted annual rate of 5.56 million units in November from a pace of 5.76 million units in October, which was the fourth highest pace on record. Last month's sales activity was 5.9% above the 5.25 million unit level in November 2001.
David Lereah, NAR's chief economist, said some correction was expected. "Our projections indicate existing home sales should be fluctuating at a pace in the range of 5.2 to 5.4 million for the coming year, so it's no surprise to see sales coming off of the spike in October," he said. "For all of 2002 we'll easily surpass the record of 5.3 million sales in 2001, with sales topping the 5.5 smillion level."
According to Freddie Mac, the national average commitment rate for a 30 year, conventional, fixed rate mortgage was a record low 6.07% in November, down from 6.11% in October; it was 6.66% last Novembers. Freddie Mac began tracking mortgage rates in 1971.
NAR president Cathy Whatley said 2003 should be a good year for home buyers and sellers. "After setting two consecutive annual records, the housing market will be settling into a somewhat slower but historically healthy pace," she said. "With only a modest rise in mortgage interest rates projected, we think 2003 will be in the top three years for sales, but a better balance between home buyers and sellers means there will be less pressure on home prices across most of the country."
The national median existing home price was $161,400 in November, up 9.7% from November 2001 when the median price was $147,100. 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 November rose 1.3% from October to a total of 2.34 million existing homes available for sale, which represents a 5.1 month supply at the current sales pace, up from a 4.8 month supply in October.
"As housing inventories get closer to a 6.0 month supply, we should see price appreciation return to more normal patterns," Whatley said.
Regionally, existing homes in the West were selling at an annual rate of 1.50 million units in November, the same as in October, but the pace was 12.8% higher than November 2001. The median existing home price in the West was $215,000, up 11.7% from the same month a year earlier.
Existing home sales in the Midwest slipped 3.9% in November to an annual rate of 1.22 million units, but were 3.4% above a year ago. The median price in the Midwest was $138,000, up 11.7% from November 2001.
The home resale pace in the South declined 4.8% in November to an annual rate of 2.20 million units, but was 4.3% above November 2001. The median price of an existing home in the South was $151,100, which was 8.2% higher than a year ago.
Existing-home sales in the Northeast fell 5.9% in November to a pace of 640,000 units, but were 1.6% higher than a year ago. The median existing home price in the Northeast was $172,000, up 13.5% from November 2001
