WASHINGTON (March 26, 2001) – Sales of existing single-family homes dipped slightly last month from a strong January pace, but remain at exceptionally high levels, according to the National Association of Realtors^Ò. 

Existing-home sales edged down 0.4 percent in February to a seasonally adjusted annual rate* of 5.18 million units from an upward-revised level of 5.20 million units in January.  Last month’s sales activity was 2.6 percent below the 5.32-million unit pace in February 2000.   The highest monthly pace on record is an annual rate of 5.45 million units, recorded in June 1999.

 Dr. David Lereah, NAR’s chief economist, said lower interest rates are the key.  “The interest rate on a 30-year, fixed-rate mortgage has dropped one-and-a quarter percentage points in the last year - that means there are about 300,000 additional households who can afford to buy a home today that couldn’t qualify for a loan a year ago,” he said.  “Although the slowing economy is causing a little drag on the market, consumers who are confident about their own future are going ahead with big-ticket purchases like homes and cars,” he explained.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 7.05 percent in February, nearly unchanged from 7.03 percent in January; it was 8.33 percent in February 2000. 

NAR President Richard A. Mendenhall said the bright spot now is the opportunity for first-time buyers.  “Mortgage interest rates are currently near 30-year lows, which is opening the door to people who have been at the margins of qualifying for a loan.  Of course, strong sales to first-time buyers permit people to trade-up to larger homes, which is why housing market activity remains close to historic highs,” he said.  “The current sales pace is only 5.0 percent below the all-time record,” he added.

The national median existing-home price was $138,800 in February, up 3.8 percent from February 2000 when the median price was $133,700.  The median is the midpoint, which is a typical market price where roughly half of the homes sold for more and half sold for less.

Housing inventory levels at the end of February stood at 1.54 million existing homes available for sale, which represents a 3.6-month supply at the current sales pace.  Inventory levels are 27.3 percent above the 1.21 million homes available in February 2000.

Regionally, home resales in the West rose 3.1 percent from January to an annual rate of 1.33 million units in February; the pace was 3.6 percent below February 2000.  The median existing-home price in the West was $183,400, up 6.0 percent from the same month a year earlier.

In the Midwest, homes were reselling at an annual rate of 1.16 million units in February, up 1.8 percent from January; they were 1.7 percent below February 2000.  The median price in the Midwest was $122,300, up 5.2 percent from a year ago.

The existing-home sales pace in the South declined 2.8 percent in February to an annual rate of 2.05 million units; they were 1.0 percent below February 2000.  The median price of an existing home in the South was $128,800, which was 4.0 percent higher than February 2000.

In the Northeast, existing-home sales slipped 3.0 percent from January to a pace of 640,000 units in February; the rate was 5.9 percent below February 2000.  The median existing-home price in the Northeast was $143,700, up 0.6 percent from a year ago.  “We’re seeing more sales of smaller homes taking place now in the Northeast, so the median price is reflecting this shift,” Lereah explained.

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The National Association of Realtors, “The Voice for Real Estate,” is America’s largest trade association, representing nearly 760,000 members involved in all aspects of the residential and commercial real estate industries.

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