The rate of existing-home sales ended a six-month slide and rose 0.5 percent in October compared to September, though the rate was 11.5 percent below the October 2005 level, according to a National Association of Realtors report today.
Total existing-home sales — including single-family, townhomes, condominiums and co-ops — reached a seasonally adjusted annual rate of 6.24 million units in October. This rate is a projection of a monthly sales total over a 12-month period, adjusted for seasonal fluctuations in sales activity.
The national median existing-home price for all housing types was $221,000 in October, which is 3.5 percent below the October 2005 rate and level with the September median price. The average home price, meanwhile, has dropped for the past four months, and the October average price was 3.3 percent lower than the October 2005 price.
David Lereah, NAR’s chief economist, said in a statement that “sales are lower than sustainable due to psychological factors. The demographics of our growing population, historically low and declining mortgage interest rates, and healthy job creation mean the wherewithal is there to buy homes in most of the country, but many buyers remain on the sidelines. After a period of price adjustment, we’ll see more confidence in the market and a lift to home sales should be apparent in the first quarter of 2007.”
Lereah said that prices will likely remain slightly below a year ago during the fourth quarter of the year, while “overall prices are projected to see modest appreciation around early spring.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.36 percent in October, down from 6.4 percent in September; the rate was 6.07 percent in October 2005. Last week, Freddie Mac reported the 30-year rate dropped to 6.18 percent — the lowest since January of this year, the Realtor group announced.
NAR President Pat Vredevoogd Combs said in a statement, “With the exception of parts of the West, sellers are cutting their price enough to encourage sales. It’s an especially good market for sellers in areas with rising jobs and a growing population where prices remain moderate — those are the areas now with the strongest price growth. On the opposite extremes, about 10 percent of the country is experiencing economic weakness, and a fourth of the nation — areas that had the biggest boom — is in a correction that will take longer to balance. All of that is working to the advantage of buyers in today’s market.”
Total housing inventory levels increased 1.9 percent at the end of October to 3.85 million existing homes available for sale, which represents a 7.4-month supply at the current sales pace.
Single-family home sales rose 1.3 percent to a seasonally adjusted annual rate of 5.5 million in October from a level of 5.43 million September, but were 11 percent below the 6.18 million-unit pace in October 2005. The median existing single-family home price was $221,300 in October, which is 3.4 percent below a year ago, according to the announcement.
Existing condominium and cooperative housing sales dropped 4.8 percent to a seasonally adjusted annual rate of 741,000 units in October from an upwardly revised 778,000 in September, and were 14.5 percent lower than the 867,000-unit level in October 2005. The median existing condo price was $214,300 in October, which is 5.3 percent lower than the October 2005 price.
The U.S. average price for existing condos and co-ops has fallen for the past five months while the median price has dropped for three consecutive months. The median price of existing condos and co-ops dropped 12.2 percent in the West, 12.1 percent in the South, 4 percent in the Northeast and rose 3.8 percent in the Midwest in October compared to the same month last year.
Existing-home sales in the West rose 6.4 percent to an annual pace of 1.33 million in October but were 18.9 percent below the level in October 2005. The median price in the West was $340,000, down 0.6 percent from October 2005.
Existing-home sales in the Midwest were unchanged in October, holding at a level of 1.41 million, and were 10.2 percent lower than a year ago. The median price in the Midwest was $170,000, which is 1.2 percent below October 2005.
Existing-home sales in the Northeast declined 2.9 percent to a level of 1.01 million in October, and were 9.8 percent below October 2005. The median existing-home price in the Northeast was $254,000, down 5.2 percent from a year earlier.
Existing-home sales are based on transaction closings, the Realtor group noted, while the U.S. Census Bureau’s reports on new single-family home sales are based on contracts or the acceptance of a deposit. The association’s existing-home sales statistics are based on a sample of nearly 40 percent of multiple listing service data each month.