Sales of existing homes rose in the Midwest in August but were down across the nation after a healthy gain in July because of tight mortgage credit, according to the National Association of Realtors. Sales also rose in the South but fell in the Northeast and West.Nationally, sales of existing homes, which includes single-family, town homes, condominiums and co-ops, dropped 2.2 percent to a seasonally adjusted annual rate of 4.91 million units in August from an upwardly revised rate of 5.02 million in July. That is 10.7 percent below the 5.50 million-unit pace of August 2007.
According to figures from Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 6.48 percent in August from 6.43 percent in July; the rate was 6.57 percent in August 2007. However, by mid-September, the 30-year fixed had dropped to 5.78 percent.Lawrence Yun, NAR chief economist, said the recent drop in interest rates is an immediate impact of recent government action. “August sales reflect higher interest rates before the government takeover of Freddie Mac and Fannie Mae, and the sudden drop in mortgage interest rates over the past couple weeks is improving housing affordability,” he said. “With higher loan limits and a beefing up of the FHA program, all the mechanisms have been falling into place to increase mortgage availability.
“However, home sales will be constrained without a freer flow of credit into the mortgage market. The faster that happens, the sooner we’ll see a broad stabilization in home prices that in turn will help the economy recover,” Yun said. “Historically, housing has led the nation out of economic doldrums – there will not be an economic recovery without a housing recovery.”
The national median existing-home price for all housing types was $203,100 in August, down 9.5 percent from a year ago when the median was $224,400.
Total housing inventory at the end of August fell 7.0 percent to 4.26 million existing homes available for sale, which represents a 10.4-month supply at the current sales pace, down from a revised 10.9-month supply in July.
Single-family home sales slipped 1.4 percent to a seasonally adjusted annual rate of 4.35 million in August from an upwardly revised pace of 4.41 million in July, but are 9.6 percent below the 4.81 million-unit level a year ago. The median existing single-family home price was $201,900 in August, down 9.7 percent from August 2007.
Existing condominium and co-op sales dropped 8.2 percent to a seasonally adjusted annual rate of 560,000 units in August from an upwardly revised level of 610,000 in July, and are 19.0 percent below the 691,000-unit pace in August 2007. The median existing condo price was $212,600 in August, which is 7.2 percent below a year ago.
Regionally, existing-home sales in the Midwest rose 0.9 percent in August to a pace of 1.14 million but are 12.3 percent below August 2007. The median price in the Midwest was $168,000, down 5.6 percent from a year earlier.
Tags: , home prices, home sales, Midwest, mortgage rates
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