Existing home sales in line with expectations

Sales of existing single-family homes slipped in September following an August surge, suggesting the market is beginning to settle, according to the National Association of Realtors.

The NAR stated in an Oct. 25 release that existing-home sales slipped 2.7 percent in September to a seasonally adjusted annual rate of 5.14 million units, down from a pace of 5.28 million units in August. Last month's sales activity was 0.2 percent below the 5.15-million unit pace in September 1999.

NAR's chief economist, David Lereah, said in the release that a slight easing was to be expected following a 9.5 percent jump in resale activity from July to August.

"What we saw in August was a lot of families jumping into the market to take advantage of favorable conditions," he said. "The August surge resulted from the unique combination of a sustained decline in interest rates, pent-up demand from inventory shortages earlier in the year, and the pressure to close the transaction before the start of the school year," he explained.

NAR President Dennis R. Cronk added that home sales are in line with expectations.

"The present sales pace is on track with what we're expecting for the year settling-in to a strong housing market that is just below the record volumes we saw in 1999," he said. "We don't expect to see any wide fluctuations in home sales in the near future."

Housing inventory levels rose 1.8 percent at the end of September with 1.72 million existing homes available for sale, which represents a 4.0-month supply at the current sales pace. Inventory levels remain 12.7 percent below the 1.97 million homes available in September 1999.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 7.91 percent in September, down from 8.03 percent in August; it was 7.82 percent in September 1999.

The national median existing-home price was $141,800 in September, up 5.5 percent from September 1999 when the median price was $134,400. The median is the midpoint half the homes sell for less, while half sell for more.