Washington, Nov.25--Sales of existing single-family homes eased from an all-time high last month but remain at the third highest pace on record, according to the National Association of Realtors.
Existing-home sales declined 4.9 percent in October to a seasonally adjusted annual rate* of 6.35 million units from a record level of 6.68 million in September. Last month's sales activity was 12.8 percent above the 5.63-million unit pace in October 2002. The second highest level was an annual rate of 6.46 million units in August of this year.
David Lereah, NAR's chief economist, said the housing market is easing. "We think this marks the beginning of a soft landing for sky-high home sales," he said. "The last four months are the only months on record when the existing-home sales pace exceeded the 6.0-million mark – we expect the pace to ease gradually but to remain at historically high levels over the next year."
Housing inventory at the end of October improved slightly, rising 2.5 percent from September to a total of 2.46 million existing homes available for sale, which represents a 4.6-month supply at the current sales pace.
NAR President Walt McDonald, broker-owner of Walt McDonald Real Estate in Riverside, Calif., said housing demand is continuing to outstrip supply. "Although the supply of homes on the market saw some improvement at the end of October, inventories are still quite lean," he said. "With low interest rates continuing to fuel demand, the housing market generally favors sellers in most of the country and home prices continue to rise faster than historic averages."
The national median existing-home price was $172,400 in October, up 8.2 percent from October 2002 when the median price was $159,300. The median is a typical market price where half of the homes sold for more and half sold for less. From 1982 to 2002, the average annual price increase was 4.4 percent.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.95 percent in October, down from 6.15 percent in September; it was 6.11 percent in October 2002.
Last month, every region of the country was off from record levels of sales activity in September.
Existing-home sales in the Northeast slipped 2.7 percent in October to a pace of 730,000 units, but were 10.6 percent above October 2002. The median existing-home price in the Northeast was $197,100, up 19.5 percent from a year ago.
The existing-home sales pace in the South also slipped 2.7 percent in October – to an annual rate of 2.57 million units – but was 14.7 percent above a year earlier. The median price of an existing home in the South was $157,400, which was 6.1 percent higher than October 2002.
In the Midwest, homes were reselling at an annual rate of 1.36 million units in October, down 4.9 percent from September, but were 9.7 percent above a year ago. The median price in the Midwest was $141,600, up 2.8 percent from October 2002.
Home resale activity in the West fell 9.2 percent from September to an annual rate of 1.68 million units in October, but was 12.8 percent above October 2002. The median existing-home price in the West was $238,000, up 10.6 percent from a year ago.
