The rate of existing single-family home sales dropped 11.2 percent and home prices fell in the Northeast, Midwest and West in July compared to July 2005, the National Association Realtors reported today. The rate of existing-home sales has slid for four straight months.
Existing-home sales — including single-family, townhomes, condominiums and co-ops — dropped 4.1 percent to a seasonally adjusted annual rate of about 6.33 million units in July from a downwardly revised pace of 6.6 million June. This rate is a projection of a monthly sales total over a 12-month period, adjusted for seasonal fluctuations in sales activity.
The national median existing-home price for all housing types was $230,000 in July, up 0.9 percent from July 2005 when the median was $228,000. The median is a typical market price where half of the homes sold for more and half sold for less.
Total housing inventory levels rose 3.2 percent at the end of July to 3.86 million existing homes available for sale, which represents a 7.3-month supply of for-sale homes at the current sales pace. A supply of six months is considered to mark a rough equilibrium between a buyer’s market and a seller’s market — a supply greater than six months is generally considered to indicate a buyer’s market.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.76 percent in July, up from 6.68 percent in May; the rate was 5.7 percent in June 2005. Last week, the 30-year rate declined to 6.52 percent.
Single-family home sales dropped 5 percent to a seasonally adjusted annual rate of 5.51 million in July from 5.8 million in June, and were 11.4 percent below the 6.22 million-unit pace in July 2005, the association reported. The median existing single-family home price was $231,200 in July, up 1.5 percent from a year earlier.
Existing condo and co-op housing sales rose 2.8 percent to a seasonally adjusted annual rate of 818,000 units in July from 796,000 in June, but were 10.5 percent below the 914,000-unit pace in July 2005. The median existing condo price was $225,600 in July, down 1 percent from a year ago.
Regionally, existing-home sales in the South slipped 1.2 percent to a pace of 2.53 million in July, and were 7 percent below July 2005. The median existing-home price in the South was $192,000, up 3.2 percent from a year earlier.
Existing-home sales in the Northeast dropped 5.4 percent to an annual sales rate of 1.05 million units in July, and were 12.5 percent below a year ago. The median price in the Northeast was $276,000, down 2.1 percent from July 2005.
Existing-home sales in the Midwest fell 5.9 percent in July to a level of 1.43 million, and were 10.1 percent lower than July 2005. The median price in the Midwest was $178,000, which is 0.6 percent below a year ago.
Existing-home sales in the West dropped 6.4 percent to an annual pace of 1.32 million in July, and were 18 percent lower than a year earlier. The median price in the West was $348,000, down 0.3 percent from July 2005.
David Lereah, chief economist for the Realtor association, said in a statement, “Now sellers in many areas of the country are pricing to reflect current market realities. As a result, there could be some lift to home sales, but it’ll likely take some months for price appreciation to rise.”
Existing-home sales are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. It is not uncommon for each series to move in different directions in the same month, the Realtor association noted.
Existing-home sales, which generally account for 85 percent of total home sales, are based on a sample of about 40 percent of multiple listing service data each month — and typically are not subject to large prior-month revisions.
The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns, the association also noted.
Because there is a concentration of condos in high-cost metro areas, the national median condo price can be higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.
