2nd Quarter Existing-Home Sales Rise in Most States

Existing-home sales in the second quarter showed healthy gains from the first quarter in the vast majority of states, and price declines have increased affordability in most metro areas.

Total existing-home sales, including single-family and condo, rose 3.8 percent to a seasonally adjusted annual rate of 4.76 million units in the second quarter. Thirty-nine states experienced sales increases from the first quarter, and nine states were higher than a year ago; the District of Columbia showed both quarterly and annual rises.

NAR’s chief economist said the sales gain appears to be sustainable. “With low interest rates, lower home prices and a first-time buyer tax credit, we’ve been seeing healthy increases in home sales, which are a hopeful sign for the economy,” he said.  “There have been sustained sales gains in Arizona, Nevada and Florida, as well as diverse areas such as Maryland, the District of Columbia and Nebraska.  More recently, we’ve seen strong double-digit gains in Idaho, Utah, New Mexico, Washington, Hawaii, New York, New Jersey, Maine, Vermont, Wisconsin, Indiana, South Dakota and Montana.”

 “Given the need for related goods and services, each home sale pumps an additional $63,000 into the economy – that’s how the housing engine traditionally pulls us out of recession.  In addition, sales are drawing down inventory and that will help stabilize home values, which in turn will lessen foreclosure pressure and boost credit availability for other sectors of the economy.”

According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage declined to a record low 5.03 percent in the second quarter from 5.06 percent in the first quarter; the rate was 6.09 percent in the second quarter of 2008.

According to NAR’s President, there are unique opportunities in the current market. “Housing affordability is hovering near record highs and there’s a wide selection of homes, but first-time buyers need to move quickly to take advantage of the $8,000 tax credit because they have to finalize the transaction by November 30,” he said.  “Various state, local and nonprofit programs target first-time buyers, and a Realtor® can help you identify the programs and financing options that are currently available in your area.”

“The sharpest price declines continue to be concentrated in metros with high levels of foreclosures, including areas in California, Florida, Arizona and Nevada, where distressed homes comprise many of the transactions.”

Regionally, existing-home sales in the Northeast jumped 15.0 percent. The median existing single-family home price in the Northeast declined 9.7 percent to $246,000 in the second quarter from the same quarter in 2008. In the South, existing-home sales increased 3.9 percent in the second quarter to an annual rate of 1.76 million units. The median existing single-family home price in the South was $158,600 in the second quarter, down 10.3 percent from a year earlier.  

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