Existing Home Sales Drop Again
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Existing home sales, including single-family homes, townhomes, condos, and coops
slipped 2.2 percent in December to a seasonally adjusted annual rate of 4.89
million units from an annual pace of 5 million in November. The December figure
was 22 percent lower than the 6.27 million sales pace in December 2006.
Despite the steadily dropping sales throughout the year, 2007 ended up with
the fifth highest sales of existing homes on record. 5,652,000 existing homes
sold during the year but this was 12.8 percent fewer units than the 6,478,000
sold in 2006.
This data came on Thursday from the National Association of Realtors monthly
release of existing home sales data. Information on new home sales will be available
next Monday from the Census Department and the Department of Housing and Urban
Development.
Lawrence Yun, NAR chief economist, said, "Home sales remain weak despite
improved affordability conditions in many parts of the country, but we could
get a quick boost to the market if loan limits are raised in combination with
the bold cut in the Fed funds rate. Home prices are lower, mortgage interest
rates continue to decline and incomes are higher, but many potential buyers
are delaying a purchase.
"Although interest rates on jumbo loans have fallen somewhat, they remain
well above conventional mortgage rates," Yun said. "It isn't
surprising that the share of single-family homes selling for more than $500,000
fell to 12.4 percent of transactions in December from 14.2 percent a year ago."
The backlog of existing homes for sale fell 7.4 percent to 3.91 million homes,
a 9.6 month supply at the current attrition rate from a 10.1 month supply in
November. Yun commented that, "The fall in inventory in December is encouraging,
but inventories remain elevated and buyers have a clear edge over sellers in
many markets."
The national median existing-home price for all housing types was $208,400 in
December, down 6.0 percent from a year earlier when the median was $221,600.
The press release for NAR commented that, because home sales have slowed the
most in higher cost markets, there is a downward distortion to the national
median as the mix of closed sales has changed over the past year. For all of
2007, the median price was $218,900, down 1.4 percent from a median of $221,900
in 2006.
Single-family home sales declined 2.0 percent to a seasonally adjusted annual
rate of 4.31 million in December from 4.40 million in November, and are 21.6
percent below 5.50 million-unit level in December 2006. In all of 2007, single-family
sales fell 13.0 percent to 4.94 million.
The median existing single-family home price was $206,500 in December, down
6.5 percent from a year earlier. For the entire year the single-family median
was $217,800, 1.8 percent lower than in 2006.
Existing condominium and co-op sales fell 3.3 percent to a seasonally adjusted
annual rate of 580,000 units in December from 600,000 in November, and are 24.5
percent below the 768,000-unit pace a year ago. Condo sales for all of 2007
fell 11.0 percent to 713,000 units.
The median existing condo price was $222,200 last month, which is 2.5 percent
below December 2006. For the entire year, the median condo price was up 2.0
percent to $226,400.
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