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May 2004 |
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Resales Up, New Home Sales Down |
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Sales of existing single-family homes rose for the third consecutive month and were at the second-highest pace on record, according to the National Association of Realtors®. Existing-home sales increased 2.5 percent in April to a seasonally adjusted annual rate of 6.64 million units from a level of 6.48 million units in March. Last
month's sales activity was 15.1 percent above the 5.77-million unit pace in April 2003 and was just 0.6 percent shy of the all-time high of 6.68 million posted in September of last year.
David Lereah, NAR's chief economist, said a strong month was expected. "Given the favorable economic backdrop and strong sales momentum, a big number was expected for April home sales and it's likely we'll see another big month in May," he said. "Part of what we're seeing now is
'fence-jumping' from people wanting to buy a home before interest rates move higher. Even with an additional rise in recent weeks, the good news is that mortgage interest rates now appear to be leveling-out in the 6.3 percent range."
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Mortgage Rate Update: Rates Continue to Climb
In Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 6.32 percent, with an average 0.6 point, for the week ending April 27, 2004, up slightly from last week when it averaged 6.30 percent. Last year at this time, the 30-year fixed-rate mortgage averaged 5.31 percent. The average for the 15-year fixed-rate mortgage this week is 5.69 percent, with an
average 0.6 point, up a little from last week when it averaged 5.67 percent. A year ago, the 15-year FRM averaged 4.73 percent.
"Although new home sales fell in April, existing home sales rose to the second highest level on record as homebuyers rushed to close in the face of low, but
surely rising, mortgage rates," said Frank Nothaft, Freddie Mac vice president and chief economist. "Current mortgage rates are now a full point above where they were last year, and almost half a point higher than they were last month. "Housing will, however, continue to be a pillar of strength for the economy in the coming years. In fact, we expect demand for housing will require production
of about 2 million new housing units per year over the next decade, thus fueling growth in the various industries that support housing."
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