Home sales holding strong in most states

Favorable affordability conditions, fed by strong household growth, maintained strong total existing-home sales activity in the third quarter of 2001, with 45 states posting increases from a year ago, according to a news release from the Na-tional Association of Realtors.

The NAR survey showed that nationwide the seasonally adjusted annual rate of existing single-family, apartment condominium and co-operative home sales totaled 5.96 million units in the third quarter of this year, up 4.5 percent from the 5.70-million-unit pace in the third quarter of 2000.

The record was 6.07 million units, re-corded in the first quarter of 2001; the second-highest level of sales activity was a 6.04-million annual rate in the second quarter of this year.

Highest quarters

David Lereah, NAR's chief economist, said sales in the first eight months of this year were remarkable.

"The two highest quarters ever for to-tal home sales were recorded this year, and even with the impact of Sept. 11, third quarter sales were still the sixth-best on record," he said. "Although sales will be modestly dampened in the months ahead, the fundamentals of the market are so good we're expecting a rebound by spring."

Total sales rose by double-digit rates in 17 states in the third quarter, compared to the same quarter in 2000. Only three states and the District of Columbia re-ported a decline in the resale rate, while two states, Nebraska and Vermont, saw no change in comparison with a year ago.

NAR President Martin Edwards Jr. said the current mortgage market presents "unique opportunities," especially for first-time buyers. "We have to go back to 1967 to see mortgage interest rates as low as they are today, and with housing inventories starting to recover, today's market presents excellent opportunities for all segments of the market," he said.

Freddie Mac

According to Freddie Mac, the average commitment rate on a 30-year conventional fixed-rate mortgage was 6.97 percent in the third quarter, down from 7.13 percent in the second quarter; it was 8.03 percent in the third quarter of 2000.

The latest weekly survey shows the average is 6.45 percent, the lowest since Freddie Mac began tracking mortgage interest rates in 1971.

The strongest year-to-year increase was in Alaska where the third quarter re-sale pace rose 20.0 percent compared to the third quarter of 2000. Next came West Virginia, which rose 18.9 percent from a year ago. New Mexico posted the third highest increase, up 18.7 percent from last year's third quarter rate.

Midwest figures

The Midwest, with a 1.23 million-unit annual rate, recorded a 5.2 percent in-crease in home resales for the third quarter compared with a year earlier, the release said. Minnesota led the region with an increase of 10.6 percent in resale activity for the third quarter of 2001 compared to the same period a year ago. The next highest increase was in Iowa, where existing-home sales rose 10.3 percent from a year ago, followed by North Dakota, where sales activity increased 9.3 percent from the third quarter of 2000.

Regionally, the South experienced the highest increase in the third quarter, re-cording a sales rate of 2.42 million units, up 6.0 percent from a year ago. After West Virginia, the strongest increase was in Oklahoma, where the resale pace was 16.8 percent higher than the third quarter of 2000. Virginia was up 11.6 percent, while South Carolina, Mississippi, Ken-tucky and Delaware also experienced double-digit increases during the same time frame.

Northeast

In the Northeast, the total existing-home sales pace of 766,000 units in the third quarter rose 2.3 percent from a year ago. Leading the region was Pennsylvan-ia, where resales rose 6.2 percent from the third quarter of 2000. New Jersey sales activity increased 3.0 percent in the last year, while Rhode Island's pace rose 2.8 percent.

The West, with a resale rate of 1.54 million units, increased 2.7 percent in the third quarter of 2001 compared to the same quarter a year ago. After Alaska and New Mexico, the next highest in-crease was in Wyoming, where existing-home sales rose 18.3 percent from a year ago, while Nevada, Arizona, Montana, Utah and Oregon also experienced double-digit increases from the third quarter of 2000.

Total home sales

Total home sales include single family, townhomes, condominiums and co-operative housing. This differs from NAR's monthly series on existing-home sales, which is based only on single-family homes (detached and townhomes).

The seasonally adjusted annual rate for a particular quarter represents what the total number of actual sales for a year would be if the relative sales pace for that quarter was maintained for four consecutive quarters.

Seasonally adjusted rates are used in reporting quarterly data to factor out seasonal variations in resale activity. For example, sales volume normally is higher in the summer and relatively light in winter, primarily because of differences in the weather.

Forecasts for state existing-home sales in 2002 will be released Dec. 12.