About 26 states had an increase in sales activity in first-quarter 2006 compared to first-quarter 2005, the National Association of Realtors trade group reported today, while the national rate of sales dropped 2.1 percent.
The seasonally adjusted annual rate of sales was 6.8 million units in the first quarter, the association reported. This rate is a projection of a quarterly sales total over a full year, adjusted for seasonal fluctuations in sales activity. Sales volume normally is higher in the summer and relatively light in winter, primarily because of differences in the weather and household buying patterns, the group reported.
The biggest increase was in New Mexico, where existing-home sales rose 26.2 percent from the first quarter of 2005. Louisiana’s first-quarter resale pace rose 22.9 percent from a year earlier, while Montana experienced the third-strongest gain, up 17.5 percent. Six other states recorded double-digit sales increases from a year ago. Twenty-one states and the District of Columbia experienced declines. Complete data for three states was not available, the association reported.
Regionally, the strongest performance was in the South, which reported an increase of 2.3 percent to an existing-home sales pace of 2.71 million units in the first quarter in comparison with a year ago. After Louisiana, the strongest increase in the South was in Mississippi, up 17.3 percent from the first quarter of 2005; resales in North Carolina rose 17 percent; Arkansas and Tennessee also posted double-digit sales increases.
In the Midwest, existing-home sales rose 1.1 percent to a 1.56 million-unit annual sales level from the first quarter of 2005. Indiana led the region, up 10.4 percent from a year earlier, followed by Iowa, up 9 percent, and Ohio, with an increase of 6.2 percent.
The Northeast recorded an existing-home sales pace of 1.12 million units in the first quarter, down 2.9 percent from a year earlier. Sales activity in Maine rose 4.6 percent from the first quarter of 2005, Rhode Island increased 2 percent and New York sales declined 2.2 percent, the association reported.
In the West, the existing-home sales level of 1.41 million units was 12.4 percent below the first quarter of 2005. After New Mexico and Montana, the best performance for the region was in Utah where existing-home sales rose 12.7 percent from a year earlier; Hawaii sales increased 6.3 percent while Alaska rose 5.9 percent.
According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage was 6.24 percent in the first quarter, up from 6.22 percent in the fourth quarter; it was 5.76 percent in the first quarter of 2005.
David Lereah, NAR’s chief economist, said in a statement that rising interest rates have dampened sales. “A steady rise in mortgage interest rates has slowed home sales in higher cost areas, yet job growth in some moderately priced markets is boosting sales in other areas. The net effect is a modest decline in home sales for the nation as a whole, but sales remain historically strong and are providing a solid underlying base for the overall economy.”
NAR President Thomas M. Stevens, who is senior vice president of NRT Inc., said in a statement, “We project home sales may soften a little further before picking up in the fourth quarter, but we’re not looking for any significant changes in the market moving forward. This should provide stability in the market so that buyers and sellers will be on a fairly level playing field in most of the country.”
Total home sales include single-family, townhomes, condominiums and co-operative housing. NAR began tracking state sales statistics in 1981.
The association reported that minor revisions have been made to quarterly seasonally adjusted annual sales rates for 1999 through 2005. Each May, NAR Research incorporates a review of seasonal activity factors and adjusts historic data based on its most recent findings. Normally revisions are for the past three years, but these revisions include some adjustments back to the benchmark year of 1999, the trade group reported.
