EHS volume chart -- seasonally adjusted

EHS median sales price chart -- not seasonally adjusted

WASHINGTON (May 25, 2000) – Sales of existing single-family homes dropped in April, but inventory levels are recovering and the overall market remains strong, according to the National Association of Realtors.

Sales of existing-homes declined 6.2 percent in April to a seasonally adjusted annual rate* of 4.88 million units from a 5.20-million unit pace in March. Last month’s resale pace was 6.9 percent below the 5.24-million unit rate recorded in April 1999.

At the end of April there were 1.57 million existing homes available for sale, which represents a 3.9-month supply at the current sales pace, up 25.8 percent from a 3.1-month supply of housing inventory in March. However, the current supply is 22.0 percent below April 1999, when there was a 5.0-month supply of homes on the market.

Dr. Fred Flick, NAR’s vice president of economic research, said the market appears to be settling down. "The present volume of home sales is about what we’re expecting for the year as a whole. I think the market is adjusting to generally higher mortgage interest rates with buyers switching to adjustable-rate loans, and in some cases buying less expensive homes," he explained. "There is probably a small proportion of buyers – mostly first-time home buyers - who are having trouble qualifying for a loan," he added.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 8.15 percent in April, down from 8.24 percent in March; it was 6.92 percent in April 1999.

Cronk noted that interest rates have been edging higher in May. "It is especially important for first-time buyers to seek advice from a real estate professional to learn about programs that can help them in the current housing market," he said.

The national median existing-home price was $136,700 in April, up 4.6 percent from the same month a year ago when the median price was $130,700. The median is the midpoint -- half the homes sell for less, while half sell for more.