Total existing-home sales -- including single-family, apartment condominium and co-operative sales -- reached its second-highest record pace in the fourth quarter of 2004. Forty states and the District of Columbia showed increases in sales activity over the same period in 2003, the National Association of Realtors (NAR) reported yesterday.
NAR's latest report on total existing-home sales shows that nationwide the seasonally adjusted annual rate was 7.76 million units in the fourth quarter, up 7.3 percent from the 7.24 million-unit level in the fourth quarter of 2003. The record was a pace of 7.80 million units in the second quarter of 2004.
The strongest increase was in Arizona, where the fourth-quarter resale pace rose 28.8 percent compared with the fourth quarter of 2003. North Carolina existing-home sales rose 25.4 percent from a year earlier, while Georgia posted the third highest increase, up 21.7 percent. Eighteen other states also recorded double-digit sales gains from a year ago. Nine states posted declines; complete data was not available for one state.
David Lereah, NAR's chief economist, says that changes between states are largely academic. "Even with the variations, the vast majority of states set records for home sales in 2004 and most of the rest had their second-best year," he said. "In some cases, fourth quarter sales were down-from a year-ago surge, but the sales levels in and of themselves are historically strong in every state." NAR data shows 45 states and the District of Columbia set home sales records last year, while three states had their second-best showing; there was insufficient data for two states.
NAR President Al Mansell says the United States is in a long-term housing expansion. "The reason we keep setting annual records for home sales is that we continue to experience the right combination of factors necessary for strong activity, led by low interest rates," he says. "Mortgage interest rates have continued to defy expectations and are lower than anticipated. Low interest rates continue to offer opportunities to first-time buyers -- a huge potential market … They provide a ready market for existing owners wishing to make a trade, so there is strong demand in every sector of the housing market."
According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage was 5.73 percent in the fourth quarter, down from 5.89 percent in the third quarter; it was 5.92 percent in the fourth quarter of 2003. Last week, it was reported at 5.63 percent.
Regionally, the South reported the strongest annual increase -- up 8.7 percent to a resale pace of 3.22 million units in the fourth quarter in comparison with the same quarter in 2003. After North Carolina and Georgia, the strongest increase in the South was in Arkansas, up 16.5 percent from a year earlier; Alabama existing-home sales jumped 15.9 percent in the same time frame, while South Carolina rose 15.4 percent. Seven other Southern states also posted double-digit sales increases.
In the West, the fourth quarter existing-home sales rate of 2.11 million units, rose 8.0 percent from the fourth quarter of 2003. After Arizona, the next highest increase in the region was in New Mexico, where total existing-home sales rose 21.0 percent compared with a year earlier; Washington sales activity rose 19.0 percent in the same time frame, while Wyoming increased 16.3 percent. Oregon and Alaska also posted double-digit sales gains.
In the Midwest, total existing-home sales increased 5.0 percent to a 1.51 million-unit annual sales rate compared with the same period in 2003. Iowa led the region, up 18.5 percent from the fourth quarter a year earlier. Missouri ranked second, posting a 14.1 percent increase, followed by North Dakota, with a gain of 12.5 percent.
The Northeast recorded an existing-home sales pace of 915,000 units in the fourth quarter of 2003, up 4.3 percent from a year earlier. Massachusetts experienced the strongest increase in the region with sales activity 14.8 percent above a year ago; Maine was up 9.2 percent while Rhode Island existing-home sales increased 7.7 percent.
Continuing low mortgage rates and a tight inventory of existing single-family homes for sale in Florida sparked buyer demand in fourth quarter 2004, bringing the statewide median sales price to $193,200 -- a 22 percent increase over the median price during the same quarter in 2003, according to FAR.
