Existing-home sales continued their record pace in June, as new-home sales just missed the record pace set in May, but new-home sales were well ahead of last June's sales by double digits.

Existing-home sales rose to a seasonally adjusted annual rate of 6.95 million -- up more than 2 percent from 6.81 million units in May, and 17.4 percent above the 5.92-million unit pace in June 2003, according to the National Association of Realtors.

Sales of new single-family homes hit a seasonally adjusted annual rate of 1.326 million units in June, compared to the record 1.337-million unit pace set in May. The June numbers this year are 11.1 percent above sales in June 2003, according to the U.S. Commerce Department.

Strong population and household growth, improving economic and job conditions, favorable financing terms and the continued investment potential of new homes combined to keep home sales hot.

"Buyer demand for new homes remains quite strong as job growth proceeds and consumer confidence builds," said Bobby Rayburn, president of the National Association of Home Builders (NAHB) and a home and apartment builder from Jackson, Miss.

First Rate Hike In Five Weeks

What's likely to spur more home buying from rate-chasing buyers, mortgage interest rates rose for the first time in five weeks breaking the six percent barrier for the second time this year.

Fixed interest rates had been falling from 6.32 percent on June 16 to 5.98 percent July 22, before turning up July 29 to 6.08 percent on 30-year conforming loans, according to Freddie Mac's Primary Mortgage Market Survey. Rates could be rising in anticipation of the next Federal Reserve Board's rate hike on benchmark rates, said Frank Nothaft, Freddie Mac's chief economist.

"Mortgage rates rose a little this week in response to expectations that the Federal Reserve Board (Fed) is willing to move more aggressively if inflation should become an issue," said Nothaft said.

The average 15-year fixed rate reported on July 29 was 5.49 percent, up from 5.39 percent a week ago and 1-year Treasury-indexed adjustable-rate mortgages averaged 4.17 percent, up from 4.12 percent, last week.

In related news, the national home ownership rate inched toward 70 percent, hitting a record 69.2 percent according to the U.S. Census Bureau.

"This is but one indicator of how strong the housing market has been over the last number of years," said Nothaft.

$500 Down Home Loan Program

Home buyers with disabilities can pay as little down as $500 with Fannie Mae's HomeChoice program.

To qualify, people with disabilities must be deemed disabled under the Americans with Disabilities Act or the Fair Housing Act, earn no more than 115 percent to 140 percent of the regional median income and have debt-to-income ratios of no more than 50 percent.

Eligible buyers can use personal income, the income of certain live-in aides and Social Security, disability insurance and state-assistance programs as income toward qualifying for the special loans.

Size Matters In Home Cooling

An air conditioner that's too small won't get the job done efficiently and one that's too large wastes energy.

Consumer Reports has adapted the printed version of the Association of Home Appliance Manufacturers' air conditioner size selection worksheet to come up with an online electronic version that helps you through the math to easily determine "How Powerful An Air Conditioner Do You Need?"

All you'll need is a tape measure, scratch pad and calculator. The feature is used only for an area to be cooled by a single air conditioner. If the room is connected to another by a permanently open doorway more than five feet wide, you'll have to consider the two rooms as one and make the necessary measurements in both areas.

Then the how-much-air conditioner feature will ask for your geographic location, a measurement of walls inside and out, the type of wall frame construction, ceiling height and area, insulation above the ceiling, floor area, door width, window area (including adjustment factors like the type of glass and window covers), the number of people likely to be in the room, heat from lights and appliances and your typical hours of air conditioning.

Once you know how much air conditioner you need, visit Consumer Reports air conditioner ratings to select the best.

Published: August 3, 2004

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A journalist for 35-years, Broderick Perkins parlayed an old-school daily newspaper career into a digital news service offering editorial content and consulting services. Perkins' San Jose, CA-based DeadlineNews Group includes the flagship news site, DeadlineNews.Com, offering real estate, personal finance and consumer journalism, and a backshop, the Deadline Newsroom.