Home sales in U.S. reach record in third quarter

All states posted increase for first time since 1983

November 16, 2003|By BLOOMBERG NEWS

U.S. home sales rose to a record in the third quarter, with every state posting an increase for the first time in 20 years, the National Association of Realtors said last week.

Sales of existing single-family homes, condominiums and cooperatively owned apartments gained 11 percent to an annualized rate of 7.4 million units from 6.69 million in the previous quarter, outstripping the record 6.7 million in the first three months of the year, the Washington-based trade group said in a statement.

Sales got a boost from "fence sitters" who decided to purchase homes when mortgage rates began moving up from a 45-year low reached in June, NAR chief economist David Lereah said.

"The low that we hit just before the beginning of the third quarter pushed a lot of people off the fence and into the market," Lereah said. "People wanted to lock in before rates moved higher."

Nevada had the strongest year-over-year sales gain, at 38 percent, followed by Washington state, up 37 percent, and Arizona, up 29 percent. The states with the smallest gains were Wyoming, with 3.4 percent, New York, with 3.9 percent, and Indiana, with 4.8 percent.

In Maryland, year-over-year sales increased 13.3 percent. Neighboring states also recorded strong gains: Sales rose 23.7 percent in Delaware; 19.9 percent in Washington, D.C.; 19.1 percent in West Virginia; 15.1 percent in Virginia; and 12.3 percent in Pennsylvania.

The last time every state showed a year-over-year sales increase was 1983, Lereah said. Forty-three states posted double-digit sales rate increases. The group began tracking state home-sales data in 1981.

The average U.S. rate for a 30-year fixed mortgage was 6.03 percent last week, according to mortgage giant Freddie Mac.

On an annual basis, the fixed rate will probably average 5.8 percent this year, 6.2 percent next year and 6.4 percent in 2005, said Frank Nothaft, chief economist for Freddie Mac, the second-largest U.S. mortgage buyer after Fannie Mae.

Last year, the annual average was 6.5 percent, the lowest in 35 years, according to Freddie Mac.

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