Total existing-home sales, including single-family and condo, fell 7.8 percent to a seasonally adjusted annual rate of 4.94 million in the fourth quarter from 5.36 million in the third quarter, but were 0.8 percent above the 4.90 million level during the fourth quarter of 2012.
According to Freddie Mac, the national commitment rate on a 30-year conventional fixed-rate mortgage averaged 4.30 percent in the fourth quarter, down from 4.44 percent in the third quarter; it was a record low 3.36 percent in the fourth quarter of 2012, with records dating back to 1971.
NAR President Steve Brown, co-owner of Irongate, Inc., REALTORS® in Dayton, Ohio, says consumers need to keep in mind that all real estate is local. “The national figures provide useful background, but it really gets down to supply and demand in a given neighborhood,” he says. “Metropolitan area figures are an excellent gauge of local housing markets, but there can be widely ranging conditions within a metro area. This is why it’s best to consult with a REALTOR®, who has additional resources and can provide much greater detail on specific locations.”
NAR’s national annual Housing Affordability Index, with breakouts for metropolitan areas, fell to 175.8 in 2013 from a record high 196.5 in 2012. For first-time buyers making small down payments, the affordability levels are relatively lower. The index is calculated on the relationship between median home price, median family income and average effective mortgage interest rate. The higher the index, the stronger household purchasing power; record keeping began in 1970.
An index of 100 is defined as the point where a median-income household has exactly enough income to qualify for the purchase of a median-priced existing single-family home, assuming a 20 percent downpayment and 25 percent of gross income devoted to mortgage principal and interest payments.
Metro areas with the greatest housing affordability conditions in 2013 include Toledo, Ohio, with an index of 395.4; Rockford, Ill., at 374.5; Decatur, Ill., 343.7; Lansing-East Lansing, Mich., 331.4; and Springfield, Ill., at 327.8.
In the condo sector, metro area condominium and cooperative prices – covering changes in 55 metro areas – showed the national median existing-condo price was $197,200 in the fourth quarter, up 10.7 percent from the fourth quarter of 2012. Forty-four metros showed increases in their median condo price from a year ago, one was unchanged and 10 areas had declines.
Regionally, total existing-home sales in the Northeast declined 7.1 percent in the fourth quarter, but are 7.1 percent above the fourth quarter of 2012. The median existing single-family home price in the Northeast was $241,000 in the fourth quarter, up 5.5 percent from a year ago.
In the Midwest, existing-home sales fell 9.1 percent in the fourth quarter, but are 2.0 percent higher than a year ago. The median existing single-family home price in the Midwest increased 7.0 percent to $152,400 in the fourth quarter from the same quarter a year ago.
Existing-home sales in the South declined 4.4 percent in the fourth quarter, but are 3.6 percent above the fourth quarter of 2012. The median existing single-family home price in the South was $173,000 in the fourth quarter, up 8.3 percent from a year earlier.
In the West, existing-home sales dropped 12.7 percent in the fourth quarter, and are 8.1 percent below a year ago. With notable inventory restrictions, the median existing single-family home price in the West jumped 15.5 percent to $286,200 in the fourth quarter from the fourth quarter of 2012.