If you are getting a little muddled by the number and variety of reports about mortgage interest rates, home sales, homes prices, and so forth that we report here, please believe they are not as confusing as they appear. These are among dozens of reports issued monthly, quarterly, and annually on the subjects referenced above, reports that come from public agencies (the Departments of Commerce and Housing and Urban Development, the Office of Federal Housing Enterprise Oversight (OFHEO), and the Federal Reserve); quasi public organizations (Fannie Mae and Freddie Mac) and private groups such as the Mortgage Bankers Association (MBA) and The National Association of Realtors (NAR).


Within a given week or month, the reports issued by one of these may differ from what appear to be analogous figures issued by another. This happens because each report is based on a different set of standards, uses different methodology, and relies on data from a different unique universe than other reports. For example, both the Freddie Mac and the Mortgage Bankers Association issue stats on weekly mortgage originations, rates, and origination points, but Freddie relies on a universe of 125 mortgage companies while the Mortgage Bankers Association's survey claims to include 50 percent of all retail residential mortgages. OFHEO cites increases in home values based on earlier transactions involving the very same homes while NAR's report covers all sales of existing homes.

What really matters is the direction in which each set of figures is moving. Nearly always, no matter who is issuing the report or the actual figures expressed, each category - house prices, home sales, mortgage rates, rates of refinancing ' usually moves in the same direction, and there will be some unanimity about the degree of movement. The actual numbers can, however, vary substantially.

We try, the first time we quote a report, to give a little information about the basis and methodology used in assembling that report and we will, periodically, restate that information to give a little perspective to the numbers.

That said, here are a couple of end-of -year reports on the industry.

The National Association of Realtors last Thursday stated that existing single family home sales reached record levels in November. These figures include only homes that were sold 'ready for occupancy,' i.e., not homes under construction (as in the Commerce Department report) which may go under agreement even before the foundation is dug.

Existing home sales increased 2.7 percent to a seasonally adjusted annual rate of 6.94 million homes in November. This was 13.2% above figures for November 2003. The October, 2004 figure was 6.76 million homes.

Continued low interest rates got much of the credit for the record setting pace of home sales. David Lehreah, NAR's chief economist, said he expects that economic conditions in 2005 will be similar to 2004 and forecast a continuation of strong home sales, although not at the record pace of 2004.

The national median home price increased 10.4 percent to $188,200 compared to November 2003 levels when the median was $170,500.

Sales and prices increased everywhere in the U.S. except in the Northeast. Sales were up 6.5 percent in the West (16.6 percent higher than November, 2003), 1.8 percent in the South (15.5 percent since last year), and 0.7 percent in the Midwest (9.4 percent.) Monthly sales in the Northeast were down 1.3 percent but were still 4.2 percent higher than one year ago.

Median prices also continued to climb everywhere. Figures for November 2004 and the percent increase over November 2003 were: West, $274,000 (+13.3 percent); South, $170,000 (+10.1 percent); Midwest, $151,200 (+6.6 percent); Northeast $226,700 (+17.2 percent.)

The Mortgage Bankers Association released its Weekly Mortgage Applications Survey for the week ended December 24. The composite index was 677.4, down 1.7 percent on a seasonally adjusted basis from the previous week. On an unadjusted basis (meaning you should ignore that it was the height of the holiday season), the index was down 31.7 percent from the previous week but up 36.6 percent from the same period in 2003.

The percent of mortgage applications attributable to refinancing was down over 3 percent from the previous week and adjustable rate mortgage applications as a share of all activity decreased to 33.8 percent from 34.4 percent.

MBA showed 30 year fixed rate mortgages increased to 5.72 percent from 5.69 percent the previous week.