Existing single-family home sales dropped 2.9 percent from June to July, though sales were still the third best on record, the National Association of Realtors reported today. Home sales reached a seasonally adjusted annual rate of 6.72 million units in July, down from 6.92 million units in June. The seasonally adjusted annual rate projects the monthly sales total for a 12-month period. The July sales numbers were up 8.6 percent over July 2003, the association also reported.
David Lereah, chief economist at the association, said, “Prior to this year, the July sales pace would have been a real eye-popper. The fact is – it remains so. The present level of home sales activity is considerably above last year’s record, and the new benchmark we’ll set in 2004 is a significant contributor to overall U.S. economic growth.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.06 percent in July, down from 6.29 percent in June. It was 5.63 percent in July 2003.
Lereah said interest rates have continued to decline over the last few weeks. “The 30-year fixed-rate mortgage is now in the range of 5.8 percent, which will preserve favorable housing affordability conditions and help to keep home sales historically strong in the months ahead.”
Walt McDonald, association president and broker-owner of Walt McDonald Real Estate in Riverside, Calif., said mortgage interest rates are only part of the picture. “The fundamental demand from entry-level buyers, dominated by the second-largest generation in U.S. history – the children of the baby boom – will drive home sales over the next 10 years because this generation is entering the prime years in which people typically buy their first home.”
The national median existing-home price was $191,300 in July, up 8.7 percent from July 2003 when the median price was $176,000. 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 July were unchanged from June at 2.4 million existing homes available for sale, which represents a 4.3-month supply at the current sales pace.
Regionally, the existing-home sales pace in the South rose 0.4 percent in July to an annual rate of 2.77 million units, and was 11.7 percent above a year ago. The median price of an existing home in the South was $176,800, up 7 percent from July 2003.
Existing-home sales in the Northeast slipped 1.4 percent in July to a pace of 730,000 units, but were 4.3 percent above July 2003. The median existing-home price in the Northeast was $216,100, up 8.8 percent above a year ago.
Existing homes in the Midwest were selling at an annual rate of 1.39 million units in July, down 4.8 percent from June, but were 3 percent higher than the same month a year earlier. The median price in the Midwest was $157,200, up 6.6 percent from July 2003.
Home resales in the West declined 6.6 percent in July to an annual rate of 1.83 million units, but were 9.6 percent higher than a year ago. The median existing-home price in the West was $175,900, up 17.4 percent in the last year.
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