Once again upsetting predictions by analysts of a slow-down, sales of existing single-family homes in January rose above the previous month’s record high rate, the National Association of Realtors reported.

The association reported a seasonally adjusted annual sales rate of 5.07 million units in January, up 16.0 percent from the rate of 4.37 million units recorded a year ago. The January rate rose 0.8 percent from the December figure of 5.03 million units -- a record-high seasonally adjusted annual sales rate.

NAR President Sharon A. Millet said the January figures are a sign that consumers are continuing to reap the benefits of a sound economy.

"Strong consumer confidence in the nation’s economy and continued low mortgage interest rates generated the last several months of activity in the resales market," she said. "This economy has benefited all segments of the residential market, helping many people buy for the first time and allowing others the opportunity to buy a larger home," Millet noted. "Even a slight uptick in interest rates from a month ago failed to dampen the confidence of consumers," she added.

The national median price for existing, single-family homes was $131,700, up 4.4 percent from $126,100 posted a year ago. The median is a midpoint -- half the homes sell for more, half for less.

Despite the good news this month, Henry Willmore, senior economist at Barclays Capital, said there are signs the housing sector is ready to slow from its record-setting pace of 1998.

"There is some evidence of slowing,'' he said, including a decline in some components of the National Association of Home Builders (NAHB) monthly index and in applications for mortgage purchases tracked by the Mortgage Bankers Association of America (MBA).

The NAHB index was at 73 for February, dipping for the second month in a row. The index, which measures market sentiment of builders, reached an all-time high of 78 last November and December.

The latest MBA survey, released last week, showed a leveling off in refinancing activity -- down 0.6 percent -- and a minimal uptick in the seasonally adjusted market index of 1.5 percent.

Also, Willmore said, mortgage rates inched upward again in January, further discouraging home sales.

Robert Van Order, economist at Freddie Mac, said the existing homes sales rate was "extremely'' high in December.

"I think existing sales have plateaued,'' he said, though the market should continue to be healthy. ``Applications have slowed, but they are still pretty strong,'' he said, noting that refinancings accounted for slightly over 50 percent of the market. "I would guess an awful lot is trade-up buyers,'' he said.

Paul Taylor, senior economist at America's Community Bankers, said he is looking for a decline in existing home sales to 4.92 million annualized units, citing the NAHB and MBA surveys which he said suggest a ``trending down.'' He also noted that ``mortgage rates have headed back up.''

Taylor said consumers taking advantage of 1998 tax credits before yearend likely boosted the December numbers -- a phenomenon that won't be a factor in the January figures.

Winter weather that was more typical for January versus the unseasonably mild December also likely helped bring home sales "back in line with traditional weather patterns,'' he said.

"We think that (sales level) is kind of peaking with the application index plateauing,'' he said, referring to the MBA survey," said Robert Barr, senior economist at Fannie Mae.

A healthy U.S. employment market was a major factor, he said, and that continues to be supportive of the housing industry. ``We have had strong job growth over the last several months and personal income growth. It has been a great environment for home sales,'' he said.

James F. Smith, NAR chief economist, noted that sales activity across all the regions was healthy, with only the Midwest sliding slightly.

"Sales activity in all the regions remains strong, indicating that consumers wanting to purchase homes have not been hindered by winter weather conditions," he said.

"Overall, what we are seeing in the resale market is a carryover of momentum by buyers from late in 1998. With the holidays behind us and spring just ahead, many 1998 lookers are now going through with their purchases," Smith said. "This is an indicator that consumers are comfortable with the low unemployment rate, low inflation and interest rates."

The sales pace in the West rose 1.8 percent to 1.1 million units between December and January. The rate rose 13.4 percent from January 1998. The West’s median price was $166,400, up 2.7 percent from a year ago.

In the South, the resales pace remained unchanged from December to January, posting a rate of 1.97 million units. This rate was up 14.5 percent from January 1998. The median existing-home price in the South was $115,700 for January, up 4.1 percent from a year ago

The Midwest posted a rate of 1.28 million units, a decrease of 1.5 percent from December. However, the rate was up 14.2 percent from the recorded rate of 1.12 million units in January 1998. The median price in the Midwest was recorded at $115,400, up 7.1 percent from a year ago.

Regionally, the Northeast posted the strongest month-to-month gain, recording a regional pace of 720,000 units, up 5.8 percent from the December pace of 680,000 units. This rate was up 9.0 percent from a year ago. The median price in the Northeast was $155,300, an increase of 6.6 percent from a year ago

Published: February 26, 1999

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