Existing single-family home sales surged in 2004, well above the previous record set in 2003, while the December pace declined from a monthly record in November, according to the National Association of Realtors (NAR).
There were a total of 6,675,000 existing-home sales in 2004, up 9.4 percent from 6,100,000 in 2003. This is the fourth consecutive annual record. NAR began tracking the sales series in 1968.
Existing-home sales slipped 3.3 percent in December to a seasonally adjusted annual rate of 6.69 million units from a downwardly revised level of 6.92 million units in November, which was tied with June 2004 for the highest on record. Last month’s sales activity was 5.0 percent higher than the 6.37-million unit level in December 2003 and was the sixth-highest monthly pace on record.
David Lereah, NAR’s chief economist, said a decline was expected in December. “Our sense was that November sales were the peak for the current housing cycle, but activity remains strong,” he said. “There is no sign of a downturn. Home sales will continue at historically high levels, and 2005 is expected to be the second-best year on record for the housing market.”
NAR President Al Mansell, CEO of Coldwell Banker Residential Brokerage in Salt Lake City, said market conditions are favorable. “Investment opportunities remain for potential home buyers,” he said. “Low mortgage interest rates are keeping the door to homeownership open, which is the key to building family wealth over time.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.75 percent in December, compared with 5.73 percent in November and 5.88 percent in December 2003. The average 30-year rate for all of 2004 was 5.84 percent, the second lowest annual average since Freddie Mac started tracking interest rates in 1971; the lowest was 5.83 percent in 2003.
Housing inventory levels dropped 11.7 percent at the end of December with 2.18 million existing homes available for sale, which represents a 3.9-month supply at the current sales pace. “Tight housing supply is continuing to put pressure on home prices because we still have more buyers than sellers in the market. In fact, the month’s supply of homes available for sale is the lowest on record,” Lereah said.
The national median existing-home price was $188,900 in December, up 8.1 percent from December 2003 when the median price was $174,800. The median is a typical market price where half of the homes sold for more and half sold for less.
For all of 2004, the median price was $184,100, up 8.3 percent from a median of $170,000 in 2003. This is the strongest annual increase since 1980 when the median price rose 11.7 percent.
Regionally, existing-home sales in the Midwest rose 1.4 percent from November to an annual rate of 1.41 million units in December, and were 3.7 percent above December 2003. The median price in the Midwest was $152,000, up 7.1 percent from a year ago.
In the Northeast, existing-home sales rose 1.4 percent in December to a pace of 750,000 units, and were 4.2 percent higher than a year earlier. The median existing-home price in the Northeast was $214,800, up 8.6 percent from December 2003.
Existing-home sales in the South declined 4.2 percent in December to an annual rate of 2.71 million units, but were 6.3 percent higher than a year ago. The median price of an existing home in the South was $173,200, which was 8.3 percent higher than December 2003.
The home resale pace in the West fell 7.2 percent to an annual rate of 1.81 million units in December, but was 4.0 percent stronger than December 2003. The median existing-home price in the West was $281,200, up 11.9 percent from the same month a year earlier.