Sales of existing single-family homes climbed at a healthy pace in November, reflecting the overall stability of the U.S. Economy and a continued confidence in the economy by consumers, according to the National Association of Realtors.

The seasonally adjusted annual rate of existing-home sales rose 6.0 percent in November to 5.09 million units, bouncing back from a dip the previous month that left sales below the 5.0-million mark. Last month's resale level was 1.4 percent above the 5.02 unit rate recorded for November 1998.

According to NAR President Dennis R. Cronk, home sales again exceeded the expectations of many real estate practitioners and analysts. "Consumer confidence in the economy has not dwindled. The consistent pace of the resale market attests to the fact that there is a steady demand by first-time and move-up buyers cashing in on the benefits of stable, relatively low mortgage interest rates," Cronk said. "Given the strong pace of existing single-family home sales this year, we expect this segment of the market will close 1999 at yet another all-time record high," he added. "Clearly, there are many first- time buyers purchasing starter homes and repeat buyers purchasing their second and third homes, who are anxious to buy before the new year," Cronk added.

According to Freddie Mac, the national average commitment rate for a 30- year, conventional, fixed-rate mortgages was 7.74 percent in November, down from 7.85 percent in October, but up from 6.87 percent in November 1998.

The national median existing-home price was $133,700 in November, up 3.3 percent from a year ago when the median price was $129,400. The median is the midpoint -- half the homes sell for less, while half sell for more.

NAR Chief Economist James F. Smith noted that the fact that sales bounced back to more than 5.0 million units in November from the previous month indicates that the belief by consumers in the importance of homeowership has not been deterred by any upticks in mortgage rates or other economic factors.

Smith noted that October, to date, is the only month in 1999 in which sales of existing single-family homes dipped below the 5.0-million mark.

NAR predicts the market will set a new record of 5.18 million existing- home sales in 1999, which would represent a 4.4-percent increase over the record of 4.97 million sales posted last year. "If we hit that mark, 1999 will represent the fourth consecutive annual record for existing-home sales," Smith said. "Although we anticipate a slowdown in sales for 2000, the market will remain strong, healthy and active as housing affordability conditions continue to remain favorable," Smith added. Currently the association is projecting 4.91 million existing single-family home sales for 2000, he noted.

On a regional basis, the Midwest posted the strongest sales activity. In that region, the existing-home sales pace rose 12.5 percent to an annual rate of 1.17 million units in November from 1.04 million units in October. The November sales pace was down 0.9 percent from November 1998. The median resale price in the Midwest was $120,900, an increase of 4.6 percent from the same month a year ago.

In the Northeast, the home resale pace of 610,000 units in November climbed 5.2 percent from 580,000 units in October. The sales pace dropped 6.1 percent, however, from November 1998. The median sales price of existing homes in the Northeast was $135,400, which was 1.5 percent higher than a year earlier.

In the South, the resale rate was 1.96 million units in November, up 4.8 percent from October, and up 2.6 percent from a year ago. The median resale price in the South was $120,100, up 2.6 percent from November 1998.

In the West, the resale rate of 1.35 million units in November rose 3.1 percent from 1.31 million units in October, and rose 5.5 percent from the same month a year ago. The median resale price in the West was $176,000, up 3.7 percent from November 1998.

At the end of November, there were 1.78 million existing homes available for sale, which represents a 4.3-month supply at the current sales pace.

Published: December 30, 1999

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