|EXISTING HOME SALES RECOVER IN OCTOBER
WASHINGTON (November 27, 2001) Sales of existing single-family homes rose last month, demonstrating the underlying strength of the housing market, according to the National Association of Realtors.
Existing-home sales increased 5.5 percent in October to a seasonally adjusted annual rate* of 5.17 million units from a level of 4.90 million units in September. Last month's sales activity was 2.0 percent above the 5.07-million unit pace in October 2000.
Dr. David Lereah, NAR's chief economist, expected some improvement. "Three weeks after the September 11 attacks, some of our major brokers were reporting that sales had recovered to 95 percent of pre-attack levels. While we have some way to go before we reach record activity again, this demonstrates the strong demand and favorable affordability conditions that exist in today's housing market," he said. "Some of last month's recovery results from transactions that were postponed from September, and sales might ease a little in November, but they should fluctuate in a fairly narrow range through the first quarter of next year," he added.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.62 percent in October, down from 6.82 percent in September; it was 7.80 percent in October 2000. Last month's commitment rate was the lowest since Freddie Mac started tracking its series in 1971.
NAR President Martin Edwards, Jr. said that from a historical perspective, home sales remain strong. "We've had only two years where existing-home sales have hit the five-million mark, and we're well above that for this year," he said. "Going forward, we're looking for an upturn in the spring, with total sales in 2002 essentially matching this year's strong performance." NAR expects 5.19 million existing-home sales this year, the second highest on record, up 1.3 percent from 2000.
The national median existing-home price was $145,300 in October, up 4.8 percent from October 2000 when the median price was $138,600. The median is the midpoint, which 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 October dropped 10.1 percent from September to a total of 1.95 million existing homes available for sale, which represents a 4.5-month supply at the current sales pace.
- Regionally, existing-home sales in the Northeast rose 10.2 percent in October to a pace of 650,000 units, and were 3.2 percent above October 2000. The median existing-home price in the Northeast was $142,800, up 3.5 percent from a year ago.
- In the Midwest, homes were reselling at an annual rate of 1.17 million units in October, up 7.3 percent from September, and were 5.4 percent above October 2000. The median price in the Midwest was $124,200, up 3.5 percent from a year ago.
- The existing-home sales pace in the South rose 6.2 percent in October to an annual rate of 2.05 million units, and were 2.5 percent above October 2000. The median price of an existing home in the South was $136,200, which was 6.7 percent higher than October 2000.
Home resale activity in the West rose 1.6 percent from September to an annual rate of 1.31 million units in October; however, they were 1.5 percent below October 2000. The median existing-home price in the West was $197,200, up 6.4 percent from the same month a year earlier.
*The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather.
NAR's economic and housing forecast will be released December 5, the next existing-home sales release is scheduled for December 28 at 10:00 a.m. EST.
Statistical data and surveys may be found at http://realtor.org/research.nsf.