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org Existing-Home Sales Holding At A Sustainable Pace WASHINGTON (September 25, 2006) - Existing-home sales stabilized at a sustainable pace in August, while home prices showed an anticipated decline, according to the National Association of Realtors^.
David Lereah, NAR's chief economist, said home sales appear to be leveling out. "After a stronger-than-expected drop in July, the fairly even sales numbers in August tell us the market is at a more sustainable pace," he said. "It keeps us on track to see the third highest sales year on record, but we do expect an adjustment in home prices to last several months as we work through a build up in the inventory of homes on the market." The national median existing-home price^2 for all housing types was $225,000 in August, down 17 percent from August 2005 when the median was $229,000. The median is a typical market price where half of the homes sold for more and half sold for less. "This is the price correction we've been expecting - with sales stabilizing, we should go back to positive price growth early next year," Lereah said. Total housing inventory levels rose 15 percent at the end of August to 392 million existing homes available for sale, which represents a 75-month supply at the current sales pace - the highest supply since April 1993. "In some areas home sellers are not making sufficient adjustments in their listing price, so their homes are staying on the market and contributing to the build up in inventory," said Stevens, senior vice president of NRT Inc. "Sellers are starting to become more realistic, and that could provide some lift to home sales because there is a healthy underlying demand from household growth and job creation. At the same time interest rates have moderated, so there are good opportunities for buyers in today's market." According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 652 percent in August, down from 676 percent in July; The median existing single-family home price was $225,700 in August, down 17 percent from a year ago. The median existing condo price^3 was $223,200 in August, down 24 percent from a year earlier. The median existing-home price in the Northeast was $271,000, down 39 percent from a year earlier. The median price in the Midwest was $176,000, which is 11 percent below August 2005. Existing-home sales in the South slipped 08 percent to an annual sales rate of 251 million units in August, and were 74 percent below August 2005. The median price in the South was $184,000, down 26 percent from a year ago. The median price in the West was $345,000, up 03 percent from August 2005. The National Association of Realtors^, "The Voice for Real Estate," is America's largest trade association, representing more than 13 million members involved in all aspects of the residential and commercial real estate industries. 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. Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the US Census Bureau's series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample - nearly 40 percent of multiple listing service data each month - and typically are not subject to large prior-month revisions. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. In a given market area, condos typically cost less than single-family homes. Existing-home sales for September will be released October 25. The next Pending Home Sales Index will be on October 2 and the forecast will be revised October 11.
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