Quarterly Home Sales Historically Strong in Most States Says NAR

11/14/2002

From: Walter Molony of the National Association of Realtors, 202-383-1177; wmolony@realtors.org

WASHINGTON, Nov. 14 -- Total existing-home sales activity in the third quarter of 2002 was the third-highest on record, with 34 states and the District of Columbia posting increases from a year ago, according to the National Association of Realtors(r).

The NAR survey showed that nationwide, the seasonally adjusted annual rate (see note a) of existing single-family, apartment condominium and co-operative home sales totaled 6.21 million units in the third quarter of this year, up 2.5 percent from the 6.07 million-unit pace in the third quarter of 2001. The record is a pace of 6.55 million units, recorded in the first quarter of 2002; the second-highest level of sales activity was a 6.35-million annual rate in the second quarter of this year.

David Lereah, NAR's chief economist, said all the factors necessary for a healthy housing market remain in place. "Strong market fundamentals, including low mortgage interest rates, a growing population and an unemployment rate below 6 percent, mean we have all the necessary factors for home sales activity to be near historic highs," he said.

According to Freddie Mac, the average commitment rate on a 30-year conventional fixed-rate mortgage was 6.29 percent in the third quarter, down from 6.82 percent in the second quarter; it was 6.97 percent in the third quarter of 2001. Last quarter's average interest rate was the lowest since the Freddie Mac series began in 1971.

Total sales rose by double-digit rates in six states in the third quarter compared to the same quarter in 2001. Fifteen states reported generally small declines in the resale rate, while Delaware saw no change in comparison with a year ago. NAR President Cathy Whatley said changes at the state level are relative. "Even in states that posted sales declines, the overall level of home sales activity in most areas remains fairly high in historic terms," she said. "We'd be hard-pressed to find any areas of obvious weakness. We can only point to relative changes from unprecedented levels in recent sales activity."

The strongest year-to-year increase was in Hawaii where the third quarter resale pace was 20.3 percent above the third quarter of 2001. Next came Arkansas, which rose 20.2 percent from a year ago. Nevada posted the third highest increase, up 20.0 percent from last year's third quarter rate. Regionally, the highest increase was in the Midwest where the 1.28 million-unit annual rate was 3.9 percent above the third quarter of 2001. South Dakota led the region with an increase of 12.7 percent in resale activity compared to the same period a year ago. The next highest rise was in Nebraska, where existing-home sales improved by 7.1 percent, followed by Kansas, where sales activity was up 7.0 percent from the third quarter of 2001.

The South recorded a sales rate of 2.60 million units in the third quarter, up 3.6 percent from a year ago. After Arkansas, the strongest increase in the region was in Alabama where the resale pace was 17.4 percent higher than the third quarter of 2001. North Carolina experienced a 7.9 percent increase, while Georgia was up 7.3 percent during the same time frame.

The West, with a resale rate of 1.59 million units, was 2.3 percent above the third quarter of 2001. After Hawaii and Nevada, the next highest increase was in New Mexico, where total existing-home sales rose 11.7 percent from a year ago. Montana experienced a 9.3 increase from the third quarter of 2001.

In the Northeast, the total existing-home sales pace of 753,000 units in the third quarter slipped 3.0 percent from a year ago. Vermont resale activity rose 5.5 percent from the third quarter of 2001, Connecticut increased 2.9 percent in the last year, while New Jersey's pace was up by 1.5 percent. The National Association of Realtors(r), "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 seasonally adjusted annual rate for a particular quarter represents what the total number of actual sales for a year would be if the relative sales pace for that quarter was maintained for four consecutive quarters. Total home sales include single family, townhomes, condominiums and co-operative housing. This differs from NAR's monthly series on existing-home sales, which is based only on single-family homes (detached and townhomes). Seasonally adjusted rates are used in reporting quarterly data to factor out seasonal variations in resale activity. For example, sales volume normally is higher in the summer and relatively light in winter, primarily because of differences in the weather and household buying patterns.

Tables of state resale rates, percent changes and historic data are available at http://realtor.org/research -- click on Existing Home Sales, then third quarter data.

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.