Sales hit big bang month, should start to decline

It appears the real estate industry may have booked its last "big bang" month for awhile -- setting record sales in June --but most number crunchers aren’t predicting a plunge in the housing economy anytime soon, but more a graceful slide in all the way to the end of the year.

Sales of existing single-family homes jumped 10.6 percent in June to a seasonally adjusted annual rate of 5.53 million units, the highest level ever. The big jump followed declines in April and May.

Once again mortgage rates, which most economists credit with creating the three year expansion, are cited now as beginning to undermine it.

A year ago rates bottomed out around 6.5 percent and for some mortgage packages a little lower. Now those rates have edged back up to 7.5 percent -- slowly but surely reducing the number of Americans who can qualify for loans.

In fact, it is that gradual move up in rates that many real estate professional’s credit with June’s outstanding sales record.

"When buyers saw interest rates moving up this spring they jumped off the fence and into the market to take advantage of excellent affordability condition before mortgage rates moved higher,'' says NAR President Sharon Millett.

Meanwhile, the national median sales price for existing homes rose 4.3 percent to $137,000 in June over June 1998.

Spreading the American dream

Minority leaders, lenders and housing groups are all redoubling their efforts to make sure ethnic minorities have a fair shot at achieving the American dream of homeownership.

In the past few weeks Fannie Mae, the Congressional Black Caucus Foundation and the National Association of Realtors all have pledged to do what they can to improve ownership rates among African Americans.

Notes NAR President-elect Dennis Cronk, "There have been improvements in the purchasing power of black Americans in this decade. In that time, the purchasing power of this group has risen 73 percent, yet only half of all black Americans are homeowners, well behind the two-thirds of all Americans who own their own homes."

Fannie Mae has awarded the Congressional Black Caucus a $500,000 grant as part of its support to help create 1 million new African American homeowners over the next five year.

For its part, the NAR says more than 1,500 Realtor members have complete diversity training in the past two years to help them sharpen their skills in assisting minorities.

Location, Location, Location

Never has it been truer that location is a primary factor in how much you can expect to pay for a home.

According to Thomas Peiffer, a consultant with Runzheimer International based in Rochester, Minn., a company specializing in corporate relocation, a 2,000 square foot home in the San Francisco suburbs would cost you $431,000, while the same house in Cincinnati would cost about $144,000.

Here is a sampling of home costs for a 2,000 square foot, four-bedroom, two and half bath home in suburban communities: