The National Association of Realtors (NAR) has reported that sales of existing homes hit a record high last month, even though they were expected to decline.
David Lereah, NAR’s chief economist, said sales had been expected to hold at high levels. “A new record is a bit unexpected, but so is the performance of mortgage interest rates which have been lower than forecast,” he said. “When we look at recent job gains, we see all the positive factors coming together to coincide with a powerful demographic demand for housing.”
A press release issued by the NAR says that total existing-home sales (including single-family, townhomes, condominiums and co-ops) went up 4.5% in April to a seasonally adjusted annual rate of 7.18 million from a downwardly revised pace of 6.87 million in March. April sales were 5.7% above the 6.79 million-unit pace in April 2004. The previous record was a sales rate of 7.02 million in June 2004.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.86% in April, down from 5.93% in March; the rate was 5.83% in April 2004. Last week, the 30-year fixed dropped to 5.71%.
NAR President Al Mansell, CEO of Coldwell Banker Residential Brokerage in Salt Lake City, said home prices have accelerated. “We’ve been facing a significant shortage of homes available for sale,” he said. “Although housing supplies rose last month, it wasn’t enough to take pressure off of prices gains, which are the strongest we’ve seen in nearly 25 years. The dynamics of the market underscore the value of housing as a solid long-term investment.”
The national median existing-home price for all housing types was $206,000 in April, up 15.1% from April 2004 when the median price was $179,000. The median is a typical market price where half of the homes sold for more and half sold for less. The last time prices rose at a stronger pace was in November 1980 when the median price rose 15.6% from a year earlier.
Total housing inventory levels rose 5.0% at the end of April to 2.48 million existing homes available for sale, which represents a 4.2-month supply at the current sales pace.
Single-family home sales rose 4.5% in April to a record seasonally adjusted annual rate of 6.28 million from a level of 6.01 million in March. Last month’s sales activity was 5.0% above the 5.98 million-unit pace in April 2004. The median single-family home price was $203,800 in April, up 15.1% from a year earlier.
Existing condominium and cooperative housing sales also hit a record, increasing 4.8% to a seasonally adjusted annual rate of 899,000 units in April from a level of 858,000 units in March. Last month’s sales activity was 10.7% above the 812,000-unit pace in April 2004. The median condo price was $223,600, up 18.4% from the same month a year ago. Condo sales last month accounted for 12.5% of market activity.
Regionally, the home resale pace in the South jumped 7.0% from March to a record annual rate of 2.74 million units in April, and was 8.3% higher than a year ago. The median price of an existing home in the South was $176,000, which was 8.0% higher than April 2004.
Total existing-home sales in the Midwest rose 5.8% to a record annual rate of 1.64 million in April, and were 3.8% above April 2004. The median price in the Midwest was $166,000, up 12.9% from a year earlier.
Existing-home sales in the Northeast increased 4.3% to a record annual pace of 1.20 million units in April, and were 7.1% above the level of a year ago. The median existing-home price in the Northeast was $243,000, up 15.2% from April 2004.
Existing-home sales in the West held even at an annual rate of 1.61 million units in April, and were 2.5% higher than April 2004. The median existing-home price in the West was $305,000, up 21.0% from the same month a year ago.
Chris is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.