Total existing-home sales, which include single-family, apartment condominium and co-operative sales, rose in 47 states and the District of Columbia in the fourth quarter of 2003 from the same period in 2002, and were at the second-highest pace on record, the National Association of Realtors reported today.
NAR’s latest report on total existing-home sales showed that nationwide the seasonally adjusted annual rate was 7.2 million units in the fourth quarter, up 9.3 percent from the 6.59 million-unit level in the fourth quarter of 2002. The fourth quarter 2003 mark was second only to a record sales pace of 7.39 million in the third quarter of 2003.
The strongest increase was in Wyoming, where the fourth quarter resale pace rose 32.8 percent compared with the fourth quarter of 2002. Nevada existing-home sales rose 32.6 percent from a year earlier, while Alaska posted the third highest increase, up 24 percent. Twenty-five other states also recorded double-digit sales gains from a year ago. Three states showed minor declines.
David Lereah, NAR’s chief economist, said housing remains a major component of economic growth. “Record levels of home sales – primarily due to historically low mortgage interest rates – have been contributing significantly to economic activity,” he said. “Related industries get a boost from the many goods and services associated with high levels of home sales. Near-record activity this year will provide a strong foundation for other sectors to grow and create jobs, which in turn will help additional households to buy homes and sustain a strong housing market through 2005 as well.”
According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage was 5.92 percent in the fourth quarter, down from 6.01 percent in the third quarter; it was 6.08 percent in the fourth quarter of 2002. The fourth-quarter average interest rate was the third lowest since the Freddie Mac series began in 1971; the lowest averages were in the second and first quarters of 2003.
NAR President Walt McDonald, broker-owner of Walt McDonald Real Estate in Riverside, Calif., said low interest rates will continue to be a familiar environment this year. “The 30-year fixed-rate mortgage should average only 6.2 percent in 2004, up a bit from last year but keeping the door to home ownership open,” he said. “Right now, the typical family is spending about 3.2 times their annual income to buy the median-priced home, but low interest rates would allow them to spend up to 4.4 times their income – meaning there is a lot of headroom in the current market.”
Regionally, the West reported the strongest annual increase for the fourth quarter with a resale pace of 1.93 million units, up 10.9 percent from the fourth quarter of 2002. After Wyoming, Nevada and Alaska, the next highest increase in the region was in Hawaii, where total existing-home sales rose 19.9 percent compared to a year earlier. Four other Western states also posted double-digit sales gains.
In the South, the resale pace of 2.95 million units in the fourth quarter rose 10.4 percent from the same quarter in 2002. The strongest increase was in North Carolina, up 21.9 percent from a year earlier; South Carolina resales jumped 19.8 percent in the same time frame, while Alabama rose 19.6 percent. Eight other Southern states and the District of Columbia also posted double-digit sales increases.
The Northeast recorded a total existing-home sales pace of 868,000 units in the fourth quarter of 2003, up 9.5 percent from a year earlier. New Hampshire experienced the strongest increase in the region with sales activity 15.0 percent above a year ago. Massachusetts resales were up 14.3 percent in the same time frame, while Maine existing-home sales increased 12.7 percent. New Jersey and New York also had double-digit gains.
In the Midwest, total existing-home sales stood at a 1.45 million-unit annual sales rate, up 5.2 percent compared with the fourth quarter of 2002. Iowa led the region, up 18.5 percent from the fourth quarter a year earlier. Missouri ranked second, posting a 14.1 percent increase, followed by North Dakota, with a gain of 12.5 percent.
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