Two studies released in the last few days indicate that both new home construction
and the sale of existing homes
to merrily roll along.
The National Association of Realtors (NAR) reported on Monday that, according
to preliminary figures, existing home-sales had set yet another new record in
June. Total sales which include single family houses, condos and townhouses,
and co-ops rose 2.7 percent to a seasonally adjusted rate of 7.33 million. This
bested the previous record of 7.18 million in April, 2005.
May, 2005 figures were revised upward to 7.14 from earlier estimates. (NAR
as well as the U.S. Census/HUD report that follows below always reports an estimated
figure late the next month and then revise the figures the following month as
additional information becomes available.)
NAR's Chief Economist, David Lereah, said that home sales for June had
been expected "to ease slightly from peaks reached over the last couple
of months. Just when you think sales activity is ready to settle into a more
sustainable pace, the housing market continues to surprise. This performance
underscores the value of housing as an investment and the importance of homeownership
in fulfilling the American dream."
The national median price for existing home sales (homes of
all types) was $219,000 in June, an increase of 14.7 percent from the same month
one year ago when the median price was $191,000. This represents the strongest
price increase since November 1980 when the appreciation over the previous month
was 15.6 percent.
Housing inventory levels did rise 3.8 percent by the end of the month to 2.65
million existing homes for sale which represents a 4.3 month supply at present
Condos and co-op sales also hit record marks for the fourth
consecutive month, rising 4.5 percent to an annual rate of 960,000 on a seasonally
adjusted basis from last month and 12.4 percent since June 2004. The median
condo price was $223,500 (compared to $218,600 for houses), up 14.8 from 2004.
The report noted that, because condos tend to be concentrated in higher-cost
metropolitan areas, the national median price is higher than single family houses.
In any given market area, however, condos typically cost less than single family
homes. Condos and co-ops represented over 13 percent of the total market for
Regionally, the West led the country with an increase of 5.5 percent in sales
for June as compared to May. The Northeast rose 3.4 percent, the Midwest 1.9
percent, and the South 1.1 percent. Regional prices increased in the same order,
17.4, 13.6, 12.7, and 9.0 percent from June 2004 figures.
NAR quotes Freddie Mac as stating that the average rate for a 30-year conventional
fixed-rate mortgage was 5.58 percent in June, down 14 basis point from May and
substantially lower than the 6.29 average in June of the previous year. Rates
have, of course, risen a bit since then.
The U.S. Census Bureau in conjunction with the U.S. Department of Housing and
Urban Development also released their monthly report on new residential construction
for the month of June.
Housing starts for June were at an annual seasonally adjusted
rate of 2,004,000, nearly identical to the May estimate but up 9.7 percent from
the June 2004 figure of 1,827,000. Single-family starts comprised 1,667,000
of the above figure, down 2.5 percent from May. Houses reaching completion during
the month did so at a seasonally adjusted rate of 1,953,000, down from the revised
May estimate of 2,092,000 but again up over 9 percent from the June, 2004 total.
And going forward, the construction industry continues to display optimism.
Building permits for privately owned housing units in June were at a seasonally
adjusted rate of 2,111,000, up 2.4 percent from the May figures and 4.8 percent
above the estimate one year earlier.