Washington, Dec. 30--The market for existing single-family home sales slipped in November from record sales levels in recent months but is maintaining a historically high pace, according to the National Association of Realtors.
Existing-home sales declined 4.6 percent to a seasonally adjusted annual rate* of 6.06 million units in November from a pace of 6.35 million units in October, and was the fifth highest pace on record. Last month's sales activity was 6.9 percent above the 5.67-million unit level in November 2002.
David Lereah, NAR's chief economist, said 2003 easily will be the high-water mark for the housing sector. "The last five months have been the strongest on record for existing-home sales. Although sales in November were off from recent peaks, last month's pace is a very respectable number," he said. "The market is being driven by low interest rates, a growing job market and a rising number of households. We will continue to see strong sales going forward, with 2004 likely to be the second-best year on record."
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.93 percent in November, down slightly from 5.95 percent in October; it was 6.07 percent in November 2002. "For all of 2003, the average fixed-mortgage interest rate was about 5.8 percent, the lowest since Freddie Mac began tracking mortgage rates in 1971," Lereah said.
NAR President Walt McDonald, broker-owner of Walt McDonald Real Estate in Riverside, Calif., said low interest rates also will predominate in 2004. "With very low inflation, we expect fixed mortgage interest rates to increase only modestly – about half of a percentage point over the next year –which will maintain favorable housing affordability conditions in most of the country," he said. "This is good news for first-time buyers who may need a little more time to save for a downpayment and closing costs."
The national median existing-home price was $170,900 in November, up 5.9 percent from November 2002 when the median price was $161,400. 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 2.8 percent from October to a total of 2.53 million existing homes available for sale, which represents a 5.0-month supply at the current sales pace.
Regionally, existing-homes in the West eased by 2.4 percent to an annual rate of 1.64 million units in November, but was 9.3 percent higher than November 2002. The median existing-home price in the West was $232,000, up 7.5 percent from the same month a year earlier.
Existing-home sales in the Northeast slipped 4.1 percent in November to a pace of 700,000 units, but were 6.1 percent higher than a year ago. The median existing-home price in the Northeast was $194,600, up 13.1 percent from November 2002.
The home resale pace in the South declined 5.1 percent in November to an annual rate of 2.44 million units, but was 8.0 percent above November 2002. The median price of an existing home in the South was $156,000, which was 4.1 percent higher than a year ago.
Existing-home sales in the Midwest fell 6.6 percent in November to an annual rate of 1.27 million units, but were 1.6 percent above a year ago. The median price in the Midwest was $143,500, up 3.5 percent from November 2002.
