Existing single-family home sales slipped in July but still managed the third-best pace on record, according to the National Association of Realtors®.

Existing-home sales declined 2.9 percent to a seasonally adjusted annual rate* of 6.72 million units in July from a record pace of 6.92 million units in June; last month's sales activity was 8.6 percent above the 6.19-million unit pace in July 2003. The second-highest sales rate was in May of this year.

David Lereah, NAR's chief economist, said changes at this volume of sales are relative. "Prior to this year, the July sales pace would have been a real eye-popper," he said. "The fact is – it remains so. The present level of home sales activity is considerably above last year's record, and the new benchmark we'll set in 2004 is a significant contributor to overall U.S. economic growth."

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.06 percent in July, down from 6.29 percent in June; it was 5.63 percent in July 2003.

Lereah said interest rates have continued to decline over the last few weeks. "The 30-year fixed-rate mortgage is now in the range of 5.8 percent, which will preserve favorable housing affordability conditions and help to keep home sales historically strong in the months ahead."

NAR President Walt McDonald, broker-owner of Walt McDonald Real Estate in Riverside, Calif., said mortgage interest rates are only part of the picture. "The fundamental demand from entry level buyers, dominated by the second-largest generation in U.S. history – the children of the baby boom – will drive home sales over the next ten years because this generation is entering the prime years in which people typically buy their first home."

The national median existing-home price was $191,300 in July, up 8.7 percent from July 2003 when the median price was $176,000. The median is a typical market price where half of the homes sold for more and half sold for less.

Housing inventory levels at the end of July were unchanged from June at 2.40 million existing homes available for sale, which represents a 4.3-month supply at the current sales pace.

Regionally, the existing-home sales pace in the South rose 0.4 percent in July to an annual rate of 2.77 million units, and was 11.7 percent above a year ago. The median price of an existing home in the South was $176,800, up 7.0 from July 2003.

Existing-home sales in the Northeast slipped 1.4 percent in July to a pace of 730,000 units, but were 4.3 percent above July 2003. The median existing-home price in the Northeast was $216,100, up 8.8 percent above a year ago.

Existing homes in the Midwest were selling at an annual rate of 1.39 million units in July, down 4.8 percent from June, but were 3.0 percent higher than the same month a year earlier. The median price in the Midwest was $157,200, up 6.6 percent from July 2003.

Home resales in the West declined 6.6 percent in July to an annual rate of 1.83 million units, but were 9.6 percent higher than a year ago. The median existing-home price in the West was $175,900, up 17.4 percent in the last year.

The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1 million Realtors® involved in all aspects of the residential and commercial real estate industries.

Statistical Note: Following availability of revisions by the U.S. Census Bureau to some statistical data, NAR will make benchmark revisions to both annual existing-home sales totals and monthly seasonally adjusted annual sales rates going back to 1989. Although the data will change, the overall characterization of the market in terms of historic comparisons and relative changes will be consistent with previously reported data. NAR's benchmark approach has been reviewed by the U.S. Federal Reserve Board and will be published with an upcoming existing-home sales news release on September 24 or October 25.

*The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns.

Existing-home sales, which are based on transaction closings, differ from the U.S. Census Bureau's series on new-home sales, which are based on contracts or the acceptance of a deposit. In the count of new-home sales, a house can be in any stage of construction ranging from not started to fully complete. The count of existing-home sales is based on completed transactions in which the home usually is ready for occupancy. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample and typically are not subject to large prior-month revisions that are fairly common in the new-home sales series.

The next existing-home sales release is scheduled for September 24, at 10 a.m. EDT. The next national outlook release is scheduled for October 7.