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Existing home sales drop
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June 25, 1999: 11:05 a.m. ET
Decline of 4% in May is second straight from record annual rate
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NEW YORK (CNNfn) - Sales of existing home sales fell in May for the second straight month, according to a National Association of Realtors report released Friday -- suggesting that the booming housing market may be slowing, but that a strong sales climate still exists.
The seasonally adjusted annual sales rate declined 4 percent to 5.04 million from April's revised 5.25 million. The May figure was below the 5.23 million annual rate that was the consensus of analysts surveyed by Reuters.
The latest figure comes just two months after March's record annual rate of 5.42 million, and is 4.6 percent above the annual rate of a year earlier.
NAR President, Sharon A. Millett, said the slip in home sales was not a concern.
"May was the second month off of the record recorded in March," she said. "We expected sales to slide a bit, but the pace is still very high, and we anticipate another strong year as we continue to enjoy a healthy economy."
Helped by low interest rates and strong consumer confidence, home sales have boomed in recent months.
Sign of the times, this one in New Jersey
Sales of new homes soared 9.2 percent in April, the Commerce Department reported. In a separate report released in April, the department said the rate of home ownership in the first quarter was 66.7 percent, just below the record high of 66.8 percent in the third quarter of 1998.
The steep U.S. home ownership rates reported for 1998 are likely to be sustained for another decade or so, Harvard University's Joint Center for Housing Studies said this week.
Still, rising interest rates could bring a slowdown in the short term. For the week ending June 25, the average rate on U.S. 30-year fixed-rate mortgages was 7.63 percent, down slightly from last week's 7.65 percent. One year ago, the rate was 6.96 percent.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 7.15 percent in May, up from 6.92 percent in April. The rate was 7.14 percent in May 1998.
The Commerce Department next week reports on new home sales for May. The consensus of analysts surveyed by Reuters sees the annual rate slipping to 949,000 from 978,000 the previous month.
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