US housing market shows signs of cooling
11/28/2005
By Financial Times reporters
Published: November 28 2005 16:42 | Last updated: November 28 2005 16:42
The US housing market showed signs of cooling as sales of existing homes eased last month, according to the National Association of Realtors.
The NAR said there was a “moderate decline” in both single-family and condo sales.
Total existing-home sales – including single-family, townhomes, condominiums and co-ops – were at a seasonally adjusted annual rate of 7.09m units in October, down 2.7 per cent from September’s 7.29m. Sales were 3.7 per cent above the 6.84m-unit level in October 2004.
David Lereah, NAR’s chief economist, said markets were getting into better balance between demand and supply.
“We are returning to more balanced markets between home buyers and sellers, one that places buyers on a more even footing. Housing activity has peaked and is coming down a bit, and we expect further cooling in the coming months. We feel confident that housing is landing softly as rates continue to rise.”
The national median existing-home price for all housing types - including single-family, townhomes, condominiums and co-ops - was $218,000 in October, up 16.6 per cent from October 2004 when the median price was $187,000. The median is a typical market price where half of the homes sold for more and half sold for less.
Total housing inventory levels rose 3.5 pe rcent at the end of October to 2.87m existing homes available for sale, which represents a 4.9-month supply at the current sales pace.
“The rise in inventory means that buyers will have a wider choice available to them, and the significant price appreciation over October last year shows that demand is still there, as markets continues to balance themselves,” said Thomas Stevens, NAR president. “Buyers know that housing is a good investment.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.07 percent in October, up from 5.77 per cent in September; the rate was 5.72 per cent in October 2004.