Existing-Home Sales
Increase by 4.6%
From The Wall Street Journal Online
August 17, 2005
Sales of existing homes continued at a strong pace in the second quarter, while home prices were higher across most metropolitan areas, according to a survey.
Low mortgage interest rates and a shortage of available homes have kept sales booming in recent years.
Some economists and housing-industry analysts, however, say the shortage has been easing in many markets, which could cause home-price appreciation to slow in the months ahead.
The National Association of Realtors said yesterday that existing-home sales rose 4.6% to a record 7.22 million units in the second quarter, up from the sales rate of 6.9 million units a year earlier.
The strongest increase was in West Virginia, where sales activity rose 21.7% compared with the second quarter of 2004.
Washington state's existing-home sales increased 19.8%, while Vermont was up 19.6% from the year earlier. Five states and the District of Columbia posted declines.
Complete data weren't available for two states.
The Northeast reported the strongest gains, up 7.5% to an annual rate of 1.21 million units. After Vermont, Connecticut reported the strongest increase in the region, with sales activity up 14.7%; New York resales jumped 6.8%.
The association said the national median existing-home price rose 13.6% last quarter, to $208,500 from $183,500 in the first quarter of 2005. The median is a typical market price where half of the homes sold for more and half sold for less.
David Lereah, the association's chief economist, attributed the increase to the tight supply of homes available for sale.
"When you look at appreciation of home prices relative to the overall rate of inflation, these are the strongest increases on record," he said. "The continuing shortages of housing inventory are driving the price gains."
According to Freddie Mac, the national average rate on a 30-year fixed-rate mortgage was 5.72% in the quarter, down from 5.76% in the first quarter. The rate was 6.13% in the second quarter of 2004.
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