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Existing Home Sales Head Down at Record Year’s End
Existing home sales set a fifth consecutive record last year, rising to 7.072 million, up 4.2% from the 6.784 million homes sold in 2004, according to the National Association of Realtors®.
The year ended on a downward note, with sales in December dropping 5.7% to a seasonally adjusted annual rate of 6.60 million, down from an upwardly revised 7.00 million in November, and leaving sales 3.1% slower than the pace recorded one year earlier.
The result of fast rising home prices and more slowly rising mortgage interest rates, the slowdown to more sustainable levels had long been anticipated, but a recent unexpected decline in mortgage rates may have complicated the picture a bit, even though housing activity is still expected to trend gradually downward.
“This is part of the market adjustment we’ve been discussing, with a soft landing in sight for the housing sector,” said David Lereah, the association’s chief economist.
“The level of home sales activity is now at a sustainable level, and is likely to pick up a bit in the months ahead,” he said. “Overall fundamentals remain solid, driven by population and employment growth as well as favorable affordability conditions in most of the country, so we expect the housing market to remain historically high but lower than last year’s record.”
Noting that if lower mortgage rates are sustained, Lereah said that “the housing market could see some unexpected lift.”
The national median existing home price for all housing types was $211,000 in December, up 10.5% from the same month a year earlier.
The median existing condo price was $228,100 in December, higher than the median price of a single-family home, which was $209,300.
Condominium and coop sales increased 1.6% last month to a seasonally adjusted annual rate of 877,000, 4.5% higher than a year earlier. Single-family sales, by comparison, dropped 5.72% to a rate of 6.14 million and were 4.2% lower than in December 2004.
Regionally, resales were unchanged in December in the Northeast at a pace of 1.09 million. Sales declined 2.6% in the Midwest to 1.52 million, 7.2% in the South to 2.58 million and 11.4% in the West to 1.40 million.
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