Total existing-home sales – including single-family, townhomes, condominiums and co-ops – slipped 2.6 percent in July to a seasonally adjusted annual rate of 7.16 million from a record of 7.35 million in June, the National Association of Realtors reported today.
Despite the slight drop, home sales in July were the third highest on record, and were 4.7 percent higher than the 6.84 million-unit pace in July 2004, the trade group also noted.
Seasonally adjusted annual rates project a monthly total over a 12-month period, accounting for seasonal fluctuations in resale activity.
David Lereah, NAR’s chief economist, said, “This is a big number any way you slice it, and housing is continuing to stimulate the overall economy.” The second highest level of sales activity ever recorded was in April of this year, with a pace of 7.18 million units.
The national median existing-home price for all housing types, meanwhile, was $218,000 in July, up 14.1 percent from July 2004 when the median price was $191,000 and up about 0.5 percent. The median is a typical market price where half of the homes sold for more and half sold for less.
Lereah said the strongest rates of price growth tend to move geographically.
“In examining the hottest markets for home price appreciation, we see a rolling boom moving from one metro area to another over time, as well as a spillover effect into nearby areas with lower home prices. This is spreading the wealth of housing returns, with a natural easing of appreciation in areas following a period of extraordinary price growth. Even after slowing in a given area, prices typically have continued to rise faster than historic norms.”
Over the last 4.5 years of record home sales, no area that has experienced a sustained period of double-digit price growth has later seen a price decline, the association reported.
NAR President Al Mansell of Salt Lake City said, “Housing inventory levels improved in July, but they’re still quite lean by historic standards. If the supply of homes rises, it should reduce competition between buyers and take some of the pressure off of prices. Even so, we expect home-price appreciation to remain above normal over the next year.”
Total housing inventory levels rose 2.6 percent at the end of July to 2.75 million existing homes available for sale, which represents a 4.6-month supply at the current sales pace.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.7 percent in July, up from 5.58 percent in June; the rate was 6.06 percent in July 2004.
After hitting four consecutive monthly records, existing condominium and cooperative housing sales declined 5 percent to a seasonally adjusted annual rate of 915,000 units from an upwardly revised level of 963,000 in June. Last month’s sales pace remained 8.4 percent above the 844,000-unit level in July 2004. The median condo price was $219,300, up 11.3 percent from a year ago, the association reported.
Single-family home sales eased by 2.3 percent to a seasonally adjusted annual rate of 6.24 million in July from an upwardly revised record of 6.39 million in June, and were 4 percent above the 6 million-unit pace in July 2004.
The median single-family home price was $217,900 in July, up 14.6 percent from a year ago.
Regionally, total existing-home sales in the South were unchanged in July, holding at a record level of 2.74 million units, and were 5 percent higher than a year earlier. The median price of an existing home in the South was $187,000, up 7.5 percent from July 2004.
Existing-home sales in the Midwest slipped 1.8 percent to an annual sales rate of 1.61 million in July, and were 2.5 percent higher than July 2004. The median price in the Midwest was $178,000, which was 11.9 percent higher than a year ago, the association also reported.
Total existing-home sales in the Northeast declined 3.3 percent to an annual pace of 1.19 million in July, and were 6.3 percent above the same month a year ago. The median existing-home price in the Northeast was $251,000, up 13.1 percent from July 2004.
In the West, existing-home sales fell 7.5 percent to a level of 1.61 million units in July, and were 3.2 percent higher than July 2004. The median existing-home price in the West was $319,000, up 16 percent in the last year.
Existing-home sales are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month, the association reported. In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample – nearly 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.
Because there is a concentration of condos in high-cost metro areas, the national median condo price is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes, the association reported.
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