WASHINGTON, April 25, 2006
Sales of existing homes edged up in March following a strong rebound in February, according to the National Association of Realtors®.
Total existing-home sales--including single-family, townhomes, condominiums and co-ops--rose 0.3 percent to a seasonally adjusted annual rate1 of 6.92 million units in March from a pace of 6.90 million in February, but were 0.7 percent below a 6.97 million-unit level in March 2005.
David Lereah, NAR's chief economist, said sales are leveling out. "It's a good sign to see home sales holding close to the level of a strong rebound in the month before," he said. "This is additional evidence that we're experiencing a soft landing. We may see some minor slowing in home sales as interest rates rise, but the market clearly is stabilizing." Lereah expects 2006 to be the third strongest year on record for home sales.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.32 percent in March, up from 6.25 percent in February; the rate was 5.93 percent in March 2005.
"We now see appreciation cooling to single-digit rates of price growth - another sign that the market is normalizing," Lereah said. The national median existing-home price2 for all housing types was $218,000 in March, up 7.4 percent from March 2005 when the median was $203,000. The median is a typical market price where half of the homes sold for more and half sold for less. Historic price data has been revised back to 1989, including updates to reflect geographic changes over time, but price patterns are consistent with previously reported data.
Total housing inventory levels rose 7.0 percent at the end of March to 3.19 million existing homes available for sale, which represents a 5.5-month supply at the current sales pace.
NAR President Thomas M. Stevens from Vienna, Va., said changes in the housing market mean consumers need more professional guidance. "Changing waters require navigational adjustments, and this is especially true for home sellers in most areas who are now dealing with buyers that are on equal footing - it's no longer a seller's market," said Stevens, senior vice president of NRT Inc. "Most buyers in today's market are well-informed and have agents that represent their interests, so sellers need good advice on how to show and market their homes in the current environment, as well as negotiation skills - critical values that real estate agents bring to the table."
Single-family home sales rose 0.3 percent to a seasonally adjusted annual rate of 6.07 million in March from 6.05 million in February, and were 0.5 percent below the 6.10 million-unit pace in March 2005. The median existing single-family home price was $217,300 in March, up 7.8 percent from a year ago.
Existing condominium and cooperative housing sales increased 0.2 percent to a seasonally adjusted annual rate of 854,000 units in March from a level of 852,000 in February, but were 2.0 percent below the 871,000-unit pace a year ago. The median existing condo price3 was $225,500 in March, up 6.1 percent from March 2005.
Regionally, existing-home sales in the Northeast rose 1.7 percent to an annual sales rate of 1.19 million units in March, and were 2.6 percent higher than a year ago. The median price in the Northeast was $275,000, up 5.0 percent from March 2005. Existing-home sales in the Midwest increased 1.2 percent to a pace of 1.63 million in March, and were 3.8 percent above March 2005. The median existing-home price in the Midwest was $160,000, up 2.6 percent from a year earlier.
In the South, existing-home sales slipped 0.7 percent in March to a level of 2.67 million, but were 1.5 percent higher than a year ago. The median price in the South was $181,000, up 6.5 percent from March 2005.
Existing-home sales in the West eased 0.7 percent to an annual pace of 1.43 million in March, and were 12.3 percent below March 2005. The median price in the West was $341,000, up 8.3 percent from a year ago.
The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing more than 1.2 million members involved in all aspects of the residential and commercial real estate industries.
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1 The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. 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 U.S. 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.
2 National and regional monthly median existing-home prices have been revised back to 1989. The fixed reporting sample of representative multiple listing services has been updated to reflect geographic changes over time so that the monthly samples for regional price measurements are as accurate as possible. In addition, regional weights have been updated and aligned to the 2000 Census. The changes in price patterns are consistent with previously reported data. Non-media inquiries for historic data should be directed to firstname.lastname@example.org.
The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns.
3 Because there is a concentration of condos in high-cost metro areas, the national median condo price is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.
Existing-home sales for March will be released April 25. The next Pending Home Sales Index will be on May 2 and the forecast will be revised May 9.