Washington, DC, Nov. 14--Total state existing-home sales activity in the third quarter was the highest on record, with 48 states and the District of Columbia posting increases from a year ago, according to the National Association of Realtors.
The NAR survey showed that nationwide, the seasonally adjusted annual rate of existing single-family, apartment condominium and co-operative home sales totaled 7.40 million units in the third quarter of this year, up 18.7 percent from a 6.23 million-unit pace in the third quarter of 2002. The previous record was an annual sales rate of 6.70 million recorded in the first quarter of this year; NAR began tracking state home sales in 1981.
David Lereah, NAR's chief economist, said this is the first time in 20 years that all available states reported sales increases (complete data for two states was not available). "Generally we see some ups and downs even in record markets for home sales, but this report is unique with all the available data moving in a positive direction at the same time," he said. "Clearly, the historic lows we've seen in mortgage interest rates this year are the biggest factor in record home sales, but the growing number of households entering the prime years for buying a first home will be driving the housing market for years to come."
According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage was 6.01 percent in the third quarter, up from 5.51 percent in the second quarter. It was 6.29 percent in the third quarter of 2002. The second quarter of this year was the lowest average interest rate since the Freddie Mac series began in 1971.
NAR President Walt McDonald, broker-owner of Walt McDonald Real Estate in Riverside, CA, said some of the transactions closed in the third quarter were negotiated late in the second quarter. "The record lows in mortgage interest rates naturally drew buyers into the market, with many more jumping in when interest rates began to rise to take advantage of favorable conditions," he said. "The good news is the 30-year fixed mortgage interest rate is hovering around 6.0 percent and is expected to increase only modestly over the next year."
Total sales rose by double-digit rates in 43 states and the District of Columbia in the third quarter compared to the same quarter in 2002. "This also is the largest number of states showing double-digit sales gains since 1983," Lereah said.
The strongest year-to-year increase was in Nevada where the third-quarter resale pace was 37.6 percent above the third quarter of 2002. Next came Washington, which rose 36.7 percent from a year ago. Arizona posted the third strongest increase, up 29.4 percent from last year's third quarter rate.
