Driven by steady economic growth, low unemployment and extremely favorable housing affordability conditions, the 1998 housing market posted an all-time high number of sales, boosted in part by a record number of sales recorded for December, according to the National Association of Realtors.
Preliminary figures from the association, announced in a Jan. 25 news release, show that sales of existing single-family homes in 1998 reached an actual totalÊof 4.78 million units, marking the highest sales total on record. The previous record was posted in 1997, when the sales total reached 4.21 million units.
Meanwhile, December 1998 sales hit a record-high seasonally adjusted annual sales rate of 5.03 million units, up 15.1 percent from a year ago. The December rate climbed 3.1 percent from the revised November figure of 4.88 million units.
NAR President Sharon A. Millett said in the release that the record sales were attributable to a continuing flood of first-time and move-up buyers cashing in on the benefits of stable, low mortgage interest rates.
In addition, Millett noted that the inventory of homes on the market also hit a record low in December.
There were 1.58 million homes available for sale in December, representing a 3.8-month supply at last month's sales rate, confirming that strong consumer demand continues to boost the housing market, Millett said.
"This is both a seller's and a buyer's market. Continuous low interest rates and the healthy economy have created a steady flow of buyers moving up to second and third homes, and they feel comfortable doing so because there are so many first-time buyers in a solid position to buy," Millett said.
"People know what they want, how much they want to spend, and they're moving ahead with confidence," she added.
Freddie Mac reported that the national average commitment rate for 30-year, conventional, fixed-rate mortgages was 6.74 percent in December, the NAR release stated. This rate was down from 6.82 percent recorded in November and 7.1 percent recorded in December 1997.
The national median price for existing, single-family homes was $130,600 for 1998, up 5.2 percent from 1997. The national median price for December was $130,600, up 3.7 percent from the December 1997 price of $125,900. The median is a midpoint half the homes sell for more, half for less.
Dr. Fred Flick, NAR vice president of economic research, said that all four regions of the nation reported strong sales activity in December, indicating that consumers in all market areas are taking advantage of low interest rates and overall affordability conditions. "Housing is a good long-term investment with little risk that also provides shelter and a stake in the community," Flick said.
"Healthy economic conditions make it possible for some people to get on the first step of the housing ladder. Consumers know that this housing market has all the right ingredients to make their dream purchases possible," he added.
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