RISMEDIA, Jan. 29, 2007-Existing-home sales eased but prices stabilized as inventories tightened in December, while 2006 was the third-highest sales year on record, according to the National Association of Realtors®.
Total existing-home sales – including single-family, townhomes, condominiums and co-ops – eased 0.8 percent to a seasonally adjusted annual rate of 6.22 million units in December from a level of 6.27 million in November. Sales were 7.9% lower than a 6.75 million-unit pace in December 2005.
There were 6,480,000 existing-home sales in all of 2006, down 8.4% from a record 7,075,000 in 2005. The second highest total was 6,779,000 in 2004; NAR began tracking home sales in 1968.
David Lereah, NAR's chief economist, said home sales remain historically high. "Despite all of the doom-and-gloom stories and dire predictions over the last year, 2006 was the third strongest year on record for existing-home sales," he said. "It looks like we're moving beyond the low for the housing cycle last fall, and buyers are responding to historically low interest rates and competitive pricing by home sellers. In addition, a tightening inventory of homes on the market is supporting prices."
Total housing inventory levels fell 7.9% at the end of December to 3.51 million existing homes available for sale, which represents a 6.8-month supply at the current sales pace – down from a 7.3-month supply in November.
The national median existing-home price for all housing types was $222,000 in December, which is unchanged from December 2005. The median is a typical market price where half of the homes sold for more and half sold for less. For all of 2006, the median price was also $222,000, up 1.1% from a median of $219,600 in 2005.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.14% in December, down from 6.24% in November. The December rate was the lowest since October 2005 when it averaged 6.07%.
NAR President Pat Vredevoogd Combs, from Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt, said the market has clearly settled with some minor monthly fluctuations. "We expect home sales to rise modestly over the course of this year," said Combs. "Although local markets vary, price appreciation will be below normal in most of the country this year, but we're looking for slow, steady gains in both home sales and prices through 2008."
Single-family home sales slipped 1.3% to a seasonally adjusted annual rate of 5.44 million in December from 5.51 million in November, and were 7.2% lower than the 5.86 million-unit pace in December 2005. In all of 2006, single-family sales declined 8.1% to 5.68 million, the third strongest total on record.
The median existing single-family home price was $221,600 in December, which was unchanged from a year ago. For all of 2006, the median single-family price was $222,000, up 1.4% from 2005.
Existing condominium and cooperative housing sales rose 2.1% to a seasonally adjusted annual rate of 777,000 units in December from an upwardly revised level of 761,000 in November. Last month's sales activity was 12.2% lower than the 885,000-unit pace in December 2005. After setting 10 consecutive annual records, condo sales for all of 2006 fell 10.4% to 803,000 units, the third highest year on record.
The median existing condo price was $227,000 in December, which was 0.3% above a year ago. In all of 2006, the median condo price was $221,800, down 0.9% from 2005.
Regionally, existing-home sales in the Midwest rose 4.3% in December to a level of 1.47 million, but were 5.8% lower than December 2005. The median price in the Midwest was $167,000, which is 2.9% below a year ago.
Existing-home sales in the South increased 0.8% to an annual sales rate of 2.49 million in December, but were 7.1% below a year ago. The median price in the South was $182,000, unchanged from December 2005.
Existing-home sales in the Northeast declined 2.8% to a level of 1.04 million in December, and were 5.5% below December 2005. The median existing-home price in the Northeast was $283,000, up 3.7% from a year earlier.
Existing-home sales in the West fell 9.1% to an annual pace of 1.20 million in December and were 15.5% lower than a year ago. The median price in the West was $349,000, up 1.5% from December 2005.
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