The rate of existing-home sales — including single-family, town homes, condominiums and co-ops — fell for the third straight month and dropped 8.9 percent in June compared to June 2005, the National Association of Realtors reported today.
The seasonally adjusted annual rate of sales reached 6.62 million units in June, compared to 6.71 million in May and 7.27 million in June 2005.
This rate is a projection of a monthly sales total sustained for 12 straight months and adjusted to account for seasonal variations in sales activity. Home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns, the association noted.
The national median existing-home price for all housing types was $231,000 in June, up 0.9 percent from June 2005 when the median was $229,000. The median is a typical market price where half of the homes sold for more and half sold for less.
Regionally, the median sales price of existing homes dropped 1.7 percent in the Midwest, fell 0.5 percent in the South, and remained flat in the West while rising 7.2 percent in the Northeast from June 2005 to June 2006.
David Lereah, NAR‘s chief economist, said in a statement that the housing market is flattening. “Over the last three months home sales have held in a narrow range, easing to a level that is near our annual projection, which tells us the market is stabilizing,” he said. “At the same time, sellers have recognized that they need to be more competitive in their pricing given the rise in housing inventories. Home prices are only a little higher than a year ago.”
“The change in price performance is directly tied to housing inventories — a year ago we had a lean supply of homes and a sellers’ market, with monthly home sales at an all-time record high,” Lereah said.
Total housing inventory levels rose 3.8 percent at the end of June to 3.73 million existing homes available for sale, which represents a 6.8-month supply at the current sales pace. By contrast, in June 2005, there was a tight 4.4-month supply on the market.
Thomas M. Stevens, NAR president, said in a statement, “People who were discouraged by the bidding wars that were so common over the last few years are finding more choices now. Relative to the five-year housing boom, this year is a buyer’s market in much of the country.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.68 percent in June, up from 6.6 percent in May; the rate was 5.58 percent in June 2005.
Single-family home sales dropped 0.9 percent to a seasonally adjusted annual rate of 5.81 million in June from an upwardly revised 5.86 million in May, and were 8.2 percent below the 6.33 million-unit pace in June 2005. The median existing single-family home price was $231,500 in June, up 1.1 percent from a year ago.
Existing condominium and cooperative housing sales fell 5.5 percent to a seasonally adjusted annual rate of 805,000 units in June from a pace of 852,000 in May, and were 14.6 percent below the 943,000-unit level in June 2005. The median existing condo price3 was $226,900 in June, down 2.1 percent from a year earlier, the association reported.
Regionally, existing-home sales in the Midwest were unchanged in June, holding at a level of 1.52 million, and were 6.2 percent lower than a year ago. The median price in the Midwest was $175,000, which is 1.7 percent below June 2005.
Existing-home sales in the West also were unchanged, at an annual pace of 1.41 million in June, and were 17.1 percent lower than June 2005. The median price in the West was $342,000, the same as a year ago.
Existing-home sales in the South eased 2.3 percent to a pace of 2.57 million in June, and were 5.5 percent below June 2005. The median existing-home price in the South was $191,000, down 0.5 percent from a year earlier.
Existing-home sales in the Northeast declined 3.5 percent to an annual sales rate of 1.11 million units in June, and were 9.8 percent below a year ago. The median price in the Northeast was $298,000, up 7.2 percent from June 2005.
The association’s existing-home sales statistics include single-family, townhomes, condominiums and co-ops, and 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. The association’s statistics generally account for 85 percent of total home sales, and are based on a sample of nearly 40 percent of multiple listing service data each month.
The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns, the association noted.