Sales of existing single-family homes rose for the third consecutive month and were at the second-highest pace on record, according to the National Association of Realtors®.

Existing-home sales increased 2.5 percent in April to a seasonally adjusted annual rate* of 6.64 million units from a level of 6.48 million units in March. Last month's sales activity was 15.1 percent above the 5.77-million unit pace in April 2003 and was just 0.6 percent shy of the all-time high of 6.68 million posted in September of last year.

David Lereah, NAR's chief economist, said a strong month was expected. "Given the favorable economic backdrop and strong sales momentum, a big number was expected for April home sales and it's likely we'll see another big month in May," he said. "Part of what we're seeing now is 'fence-jumping' from people wanting to buy a home before interest rates move higher. Even with an additional rise in recent weeks, the good news is that mortgage interest rates now appear to be leveling-out in the 6.3 percent range."

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.83 percent in April, up from 5.45 percent in March; the rate was 5.81 percent in April 2003.

NAR President Walt McDonald, broker-owner of Walt McDonald Real Estate in Riverside, Calif., said interest rates remain historically low. "It appears that we've already experienced most of the anticipated rise in mortgage interest rates and they'll probably increase only modestly in the second half of the year," he said. "Although the pace of home sales should be slower in the second half, total sales in 2004 will be close to last year's record. Americans still see housing as a good investment."

The national median existing-home price was $176,000 in April, up 7.3 percent from April 2003 when the median price was $164,100. 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 April rose 9.4 percent from March to 2.57 million existing homes available for sale, which represents a 4.6-month supply at the current sales pace.

Regionally, existing-home sales in the Midwest rose 4.4 percent to an annual rate of 1.41 million units in April, and were 11.0 percent above the same month a year earlier. The median price in the Midwest was $143,200, up 5.3 percent from April 2003.

Home resale activity in the South increased 3.5 percent in April to an annual rate of 2.67 million units, and was 16.6 percent above April 2003. The median price of an existing home in the South was $162,900, which was 7.0 percent higher than a year ago.

Existing-home sales in the Northeast rose 1.4 percent in April to a pace of 730,000 units, and were 12.3 percent above a year ago. The median existing-home price in the Northeast was $214,100, up 19.3 percent from April 2003.

In the West, the existing-home sales pace rose 0.5 percent from March to an annual rate of 1.84 million units in April, and was up 17.9 percent from April 2003. The median existing-home price in the West was $257,300, up 11.5 percent from the same month a year earlier.

*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, the 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 June 25, at 10 a.m. EDT. The next national outlook release is scheduled for June 8. Statistical data, charts and surveys also may be found in the NAR Media Center by clicking on Economic & Housing Statistics.

Published: May 26, 2004

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