WASHINGTON – Home sales were down in July and home prices in many areas were lower than in July 2005, according to the National Association of Realtors.
Sales of single-family, town homes, condominiums and co-ops dropped 4.1 percent to a seasonally adjusted annual rate of 6.33 million units in July from a downwardly revised pace of 6.60 million June, and were 11.2 percent below the 7.13 million-unit level in July 2005, the NAR reported.
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David Lereah, the NAR’s chief economist, said that although higher interest rates slowed sales, the price softening is good news for the market because it is drawing buyers.
“Many potential home buyers have been on the sidelines, some ‘kicking the tires,’ but mostly waiting for sellers to compromise on prices and terms,” he said. “Now sellers in many areas of the country are pricing to reflect current market realities. As a result, there could be some lift to home sales, but it’ll likely take some months for price appreciation to rise.”
The national median existing-home price for all types of housing was $230,000 in July, up 0.9 percent from July 2005 when the median was $228,000. The median existing single-family home price was $231,200 in July, up 1.5 percent from a year earlier. The median existing condo price was $225,600 in July, down 1.0 percent from a year ago.
Regionally, existing-home sales in the Northeast dropped 5.4 percent to an annual sales rate of 1.05 million units in July, and were 12.5 percent below a year ago. The median price in the Northeast was $276,000, down 2.1 percent from July 2005.
Lereah said that a quarter point drop in mortgage interest rates lover the last month may also help stimulate the housing market. The national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.76 percent in July, up from 6.68 percent in June; the rate was 5.70 percent in July 2005. Last week, the 30-year rate declined to 6.52 percent.
Despite lower median prices and slow sales, NAR President Thomas M. Stevens, of Vienna, Va., said most sellers continue to see excellent returns.
“Considering that typical sellers have been in their home for six years, the average appreciation during that time is close to 60 percent,” said Stevens, senior vice president of NRT Inc. “This demonstrates the value of housing as a long-term investment – the longer you own, the better your return.”
