Existing-Home Sales Hit New Record in January Says NAR

2/25/2003

From: Walter Molony, 202-383-1177; email: wmolony@realtors.org or Lucien Salvant, 202-383-1176 email: lsalvant@realtors.org both of the National Association of Realtors

WASHINGTON, Feb. 25 -- Sales of existing single-family homes rose to a new monthly record in January as home prices continued to show strong gains, according to the National Association of Realtors(r).

Existing-home sales increased 3.0 percent in January to a seasonally adjusted annual rate(note a) of 6.09 million units from an upwardly revised level of 5.91 million in December. Last month's sales activity was 2.2 percent above the previous record high of 5.96 million units in January 2002.

David Lereah, NAR's chief economist, said the momentum of sales is huge. "We've just finished a record year for home sales, but mortgage interest rates dropped to a new low in January," he said.

"Given the demands of a growing population, and with real estate becoming the safe haven for investment, many factors are in place for a continuation of strong home sales."

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was a record-low 5.92 percent in January, down from 6.05 percent in December; it was 7.00 percent in January 2002. Freddie Mac started tracking interest rates in 1971.

NAR President Cathy Whatley, owner of Buck & Buck Inc. in Jacksonville, Fla., said even with the strong momentum the association expects a temporary drop in home sales. "About a fifth of the country was essentially shut down for the better part of a week in February due to the huge snow storm in the East, so we shouldn't be surprised to see a negative impact on home sales," she said. "However, the disruption will only postpone transactions and we should see strong housing activity throughout the year."

The national median existing-home price was $160,400 in January, up 6.7 percent from January 2002 when the median price was $150,300. The median is a typical market price where half of the homes sold for more and half sold for less.

Housing inventory levels increased 6.6 percent at the end of January with 2.27 million existing homes available for sale, which represents a 4.5-month supply at the current sales pace, up from a 4.3-month supply in December.

Regionally, existing-home sales in the South rose 7.3 percent from December to a record annual rate of 2.50 million units in January, and were 5.5 percent higher than a year ago. The median price of an existing home in the South was $148,500, which was 4.5 percent higher than January 2002.

The home resale pace in the West rose 5.1 percent to a record annual rate of 1.66 million units in January; the pace was 3.1 percent stronger than January 2002. The median existing-home price in the West was $219,600, up 10.4 percent from the same month a year earlier.

In the Northeast, existing-home sales rose 4.5 percent from December to a pace of 690,000 units in January, but were 2.8 percent below a 710,000-unit level in January 2002. The record was a 720,000-unit annual rate in February 2002. The median existing-home price in the Northeast was $175,000, up 14.9 percent from a year ago.

Homes in the Midwest were reselling at an annual rate of 1.24 million units in January, down 7.5 percent from a record-high 1.34 million-unit pace in December; they were 2.4 percent below January 2002. The median price in the Midwest was $133,300, up 3.6 percent from a year earlier.

The National Association of Realtors., "The Voice for Real Estate," is America's largest trade association, representing more than 840,000 members involved in all aspects of the residential and commercial real estate industries.

----- Note a: The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity.

For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns.

----- NOTE: Minor revisions have been made to monthly seasonally adjusted annual rates for 2000 through 2002. Each February, NAR Research reviews seasonal activity factors and fine-tunes recent historic data based on findings during the last year. Revisions are posted at the Research link below.

The next existing-home sales release is scheduled for March 25, at 10 a.m. EST. The next national outlook release is scheduled for March 4.

Information about NAR is available at http://realtor.org. This and other news releases are posted in the Web site's "News Media" section under NAR News Releases. Statistical data and surveys may be found at http://realtor.org/research.

REALTOR(r) is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS(r) and subscribe to its strict Code of Ethics.