Existing-Home Sales Down in June

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RISMEDIA, July 25, 2008-After gaining in May, existing-home sales declined in June with many potential buyers on the sidelines, according to the National Association of Realtors®.

Existing-home sales-including single-family, townhomes, condominiums and co-ops — fell 2.6% to a seasonally adjusted annual rate of 4.86 million units in June from a pace of 4.99 million in May, and are 15.5% lower than the 5.75 million-unit rate in June 2007.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said there is something of a quandary in the current market. “A recent online survey of Realtors(R) shows nearly a quarter of potential home buyers are waiting on the sidelines,” he said. “However, timing the market can be very tricky, which is why home buyers should always have a long-term view to build wealth.”

Total housing inventory at the end of June rose 0.2% to 4.49 million existing homes available for sale, which represents an 11.1.-month supply at the current sales pace, up from a 10.8-month supply in May.

Lawrence Yun, NAR chief economist, said first-time home buyers are critical to the health of the housing market. “About four in 10 homes are purchased by first-time buyers, which frees existing owners to trade up,” Yun said. “With many potential first-time home buyers on the sidelines, a first-time buyer tax credit would have a significant positive impact on both housing and the economy. Combined with permanent increases to mortgage loan limits and enhancing the FHA loan program, the housing stimulus package working its way through Congress would go a long way toward helping consumers and boosting the overall economy.”

The national median existing-home price for all housing types was $215,100 in June, down 6.1% from a year ago when the median was $229,000.

Yun said there is a downward distortion in the price data. “With short sales and foreclosures accounting for approximately one-third of transactions, it’s hard to make an apples-to-apples comparison with a year ago when they were only a minor portion of the market,” he said.

Despite the overall sales decline, unpublished snapshot data shows existing-home sales rising significantly from a year ago in Bakersfield, Calif.; Fort Myers, Fla.; and Las Vegas.

“Sales are now beginning to pick up in Orlando, Fla., Phoenix, and Oakland, Calif.,” Yun said. “Interestingly, sales fell in Atlanta, Houston, and Kansas City, Mo., despite affordable home prices and solid local employment conditions.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 6.32% in June from 6.04% in May; the rate was 6.66% in June 2007.

Single-family home sales declined 3.2% to a seasonally adjusted annual rate of 4.27 million in June from 4.41 million in May, and are 14.8% below the 5.01 million-unit pace in June 2007. The median existing single-family home price was $213,800 in June, which is down 6.7% from a year ago.

Existing condominium and co-op sales rose 1.7% to a seasonally adjusted annual rate of 590,000 units in June from 580,000 in May, but are 19.7% below the 735,000-unit level a year ago. The median existing condo price was $224,200 in June, which is 2.2% lower than June 2007.

Regionally, existing-home sales in the West rose 1.0% in June to a pace of 1.03 million but are 6.4% lower than a year ago. The median price in the West was $288,400, which is 17.2% below June 2007.

In the South, existing-home sales fell 3.1% to an annual rate of 1.85 million in June, and are 18.1% below June 2007. The median price in the South was $185,300, down 2.4% from a year ago.

Existing-home sales in the Midwest declined 3.4% to an annual pace of 1.12 million in June, and are 17.6% below a year ago. The median price in the Midwest was $175,300, up 2.8% from June 2007.

In the Northeast, existing-home sales fell 6.6% to an annual rate of 850,000 in June, and are 15.8% below June 2007. The median price in the Northeast was $256,700, down 12.6% from June 2007.

For more information, visit http://www.Realtor.org.

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