Existing Home Sales Dip in January

According to the National Association of Realtors, sales of existing houses were down last month - while home prices continued to appreciate at double-digit rates. This is not a great combination for anyone on the search for a reasonable Florida home loan.

Total existing-home sales – including single-family, townhomes, condominiums and co-ops – declined 2.8 percent to a seasonally adjusted annual rate1 of 6.56 million units in January (from an upwardly revised pace of 6.75 million in December). Sales were 5.2 percent below the 6.92 million-unit level in January 2005.

David Lereah, chief economist for NAR, said sales are tracking the trend in the association’s Pending Home Sales Index.

“Our leading indicator, based on pending sales, has been trending down since hitting a record last August,” he said. “In the wake of interest rates peaking in November, we are in a bit of a trough that may be followed by a modest rise and then a general plateau in the level of sales activity. Existing-home sales should stay below the record levels experienced over the last two years, but they’ll maintain a historically high pace.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.15 percent in January, down from 6.27 percent in December; the rate was 5.71 percent in January 2005.

The national median existing-home price for all housing types was $211,000 in January, up 11.6 percent from January 2005 when the median was $189,000. The median is a typical market price where half of the homes sold for more and half sold for less.

NAR President Thomas M. Stevens from Vienna, Va., said home prices continue to show the long-term effects of tight supply: “Although housing inventory levels have been improving, it is far from being a buyer’s market in most of the country and we see the momentum of double-digit appreciation being sustained in home prices.”

This isn’t the case everywhere, of course. Orlando saw record home sales last month, indicating that Florida home loans are in solid shape.