On Heels of Rebound, Existing-Home Sales Ease

Pressure has come off of home prices and most owners can expect steadier gains in home values for the foreseeable future, says NAR President Thomas M. Stevens.
NAR: REALTOR® Magazine Online
Existing-home sales eased in April on the heels of a two-month rebound, according to the NATIONAL ASSOCIATION OF REALTORS®.

Total existing-home sales — including single-family, townhomes, condominiums and co-ops — slipped 2 percent to a seasonally adjusted annual rate of 6.76 million units in April from a downwardly revised level of 6.9 million in March. Sales were 5.7 percent below the 7.17 million-unit pace in April 2005.

The decline was expected, says NAR Chief Economist David Lereah. “Our leading indicator for pending home sales was trending lower, and our forecast model is showing a modest decline for the second quarter, with sales leveling out before rising in the fourth quarter,” he says. “Higher interest rates are slowing home sales, but we see this as another sign of a soft landing for the housing sector which remains at historically high levels.”

The national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.51 percent in April, up from 6.32 percent in March, according to Freddie Mac. The rate was 5.86 percent in April 2005.

The national median existing-home price for all housing types was $223,000 in April, up 4.2 percent from April 2005 when the median was $214,000. The median is a typical market price where half of the homes sold for more and half sold for less.

Price Run-Up is Over

NAR President Thomas M. Stevens from Vienna, Va., says the big run-up in home prices is over.

“After five years of booming sales, we are now experiencing normal market conditions across most of the country,” says Stevens, senior vice president of NRT Inc. “Inventories levels have come up to balanced levels between home buyers and sellers, so the pressure has come off of home prices and most owners can expect steadier gains in home values for the foreseeable future.”

Total housing inventory levels rose 5.8 percent at the end of April to 3.38 million existing homes available for sale, which represents a 6.0-month supply at the current sales pace.
Single-family home sales dipped 2.0 percent to a seasonally adjusted annual rate of 5.92 million in April from 6.04 million in March, and were 5.6 percent below the 6.27 million-unit pace in April 2005. The median existing single-family home price was $222,700 in April, up 4.3 percent from a year ago.

Condo, Co-op Sales Down 2.7%

Existing condominium and cooperative housing sales declined 2.7 percent to a seasonally adjusted annual rate of 839,000 units in April from an upwardly revised pace of 862,000 in March, and were 6.3 percent below the 895,000-unit pace in April 2005. The median existing condo price3 was $222,000 in March, down 0.2 percent from a year ago.

Regionally, existing-home sales in the Northeast slipped 0.8 percent to an annual sales rate of 1.18 million units in April, and were 2.5 percent below a year ago. The median price in the Northeast was $283,000, up 5.6 percent from April 2005.

Existing-home sales in the West declined 1.4 percent to an annual pace of 1.41 million in April, and were 13.0 percent below April 2005. The median price in the West was $348,000, up 4.8 percent from a year ago.

In the South, existing-home sales eased by 1.9 percent in April to a level of 2.61 million, and were 3.7 percent lower than a year ago. The median price in the South was $180,000, up 3.4 percent from April 2005.

Existing-home sales in the Midwest fell 3.7 percent to a pace of 1.57 million in April, and were 3.1 percent below April 2005. The median existing-home price in the Midwest was $166,000, down 1.2 percent from a year earlier.

For more housing market statistics and research reports,visit NAR's Research Department at REALTOR.org.