Washington: After a two and half year rage, the U.S. housing market is beginning to mellow out a little, but by all accounts 1999 will go into the record books as the best year ever.

According to the National Association of REALTORS®, sales of existing single family homes drifted down about 3.9 percent in July -- indicating that by year end some 5.41 million homes will have been sold. In all of 1998, the best home sales year recorded to date, about 4.97 million existing homes were sold.

July new home sales went up only a tiny fraction to an annualized rate of 980,000 units last month, up from 979,000 units in June.

At least some economists attribute the general flattening in home sales to a combination of factors, both on the supply side and the demand side.

In many markets, industry leaders are reporting that the inventory of quality housing has declined to a level not seen in years. Newly built homes are not coming onto the market quickly enough for lack of skilled laborers and materials such as wall board and lumber remain in short supply.

Realtors economist James Smith also notes there were elevated mortgage rates in July. "Overall conditions are still excellent for homebuyers, but the recent upswing in interest rates may have discouraged some from buying," he said.

Which Way Mortgage Rates?

Washington: The nation's top economists appear at odds over which way interest rates are heading, and most of them lay the blame for the confusion at the door of the Federal Reserve.

Most economists believe last month's tightening by another quarter point was unnecessary because there has been no clear breakout of inflation to justify the increase.

Freddie Mac officials note the monthly average commitment rate for a 30-year, fixed-rate mortgage in July was 7.63 percent, compared to 7.55 percent in June -- but just 6.95 percent in July 1998.

National Association of Realtors economics forecaster Forrest Pafenberg believes rates will end the year somewhere between 7 and 7.5 percent, while NAR chief economist Jim Smith believes rates could still fall to between 6.5 and 6 percent by December.

The median price of a new home was $155,000 in June and moved up to $156,000 in July. The average price of an existing home in July was $135,400, just 2.7 percent higher than the average price at the same period a year ago -- which should not have been an increase sharp enough to trigger Fed action.

For more interest rate news, check out the Realty Times Interest Rate Watch

"Livability" May Be Real Issue of 2000 Election

Washington: If you're looking for a good election issue next year, the American Institute of Architects says "livability" may be it.

AIA recently polled state and local government officials across the country about what problems they faced, and a resounding number pointed to increasing pressure on school systems, suburban sprawl, traffic congestion and housing development.

When asked who should deal with the problem, results differed. Members of state legislatures tended to feel "livability issues" were community issues with no help needed from the federal government. Governors and local administrators, however, tended to suggest the federal government would have to play a role in finding solutions.

Internet making a difference in homebuying

Los Angeles: Yet another survey has been released showing that the Internet is making a difference in the way homes are bought and sold.

Numbers from the California Association of Realtors show homebuyers who browse the Web first tend to spend half as much time in the house hunting part of the transaction as people who do not use the Web.

The surveyed shows that the average traditional homebuyer will visit at least eight homes before making a decision, while the average buyers who has been active on the Internet will need to visit only four homes.

Among other things, however, the survey also indicated that homebuyers who use the Internet tend to be young professionals making in excess of $100,000, while traditional buyers to be older, and make on average about $65,000 per year.

Published: August 31, 1999

Use of this article without permission is a violation of federal copyright laws.