Sales of existing single-family homes rose in February, marking only the eighth month on record that the sales pace has reached or exceeded the 6 million mark, according to the National Association of Realtors.
Existing-home sales increased 2 percent in February to a seasonally adjusted annual rate of 6.12 million units from a downwardly revised pace of 6 million units in January. Last month’s sales activity was 5.7 percent above the 5.79-million-unit pace in February 2003.
David Lereah, NAR’s chief economist, said the housing market could defy expectations this year. “Currently, we are projecting that home sales will decline slightly, but they remain at exceptionally high levels,” Lereah said. “With a strong underlying demand for housing from a growing population in a recovering economy, we could be flirting with another record this year.”
NAR President Walt McDonald, broker-owner of Walt McDonald Real Estate in Riverside, Calif., said low interest rates remain a huge factor in strong home sales. “Last month’s average mortgage interest rate was the fourth lowest on record since Freddie Mac started tracking them in 1971,” he said. “Historically low mortgage interest rates are expected to dominate again this year, which will help to keep home sales very close to last year’s record.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.64 percent in February, down from 5.71 percent in January; it was 5.84 percent in February 2003. The record low was 5.23 percent in June 2003.
The national median existing-home price was $168,100 in February, up 5.7 percent from February 2003 when the median price was $159,000. The median is a typical market price where half of the homes sold for more and half sold for less.
Housing inventory levels rose 5.9 percent at the end of February with 2.33 million existing homes available for sale, which represents a 4.6-month supply at the current sales pace. In January there was a 4.4-month supply of homes on the market.
Regionally, existing-home sales in the Northeast jumped 14.3 percent in February to a pace of 720,000 units, and were 7.5 percent above February 2003. The median existing-home price in the Northeast was $204,900, up 15.4 percent from a year ago.
Homes in the Midwest were reselling at an annual rate of 1.27 million units in February, up 7.6 percent from January, but were 0.8 percent below February 2003. The median price in the Midwest was $137,000, up 2.3 percent from a year earlier.
Home resales in the West rose 3.1 percent from January to an annual rate of 1.64 million units in February, and were 5.8 percent above a year ago. The median existing-home price in the West was $237,200, up 9.6 percent from February 2003.
The existing-home sales pace in the South dropped 4.2 percent in February to an annual rate of 2.49 million units, but was 8.7 percent above February 2003. The median price of an existing home in the South was $153,400, which was 2.8 percent higher than a year earlier.
The National Association of Realtors is a trade organization representing 1 million members.
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