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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: assetlogic who wrote (7073)	11/25/2002 10:40:04 PM
From: calgal	Respond to of 306849

Sales of existing homes rise 6 percent 11/25/2002 URL:http://www.dallasnews.com/sharedcontent/dallas/business/stories/112502dnbizhomeresale.1fa32.html Associated Press WASHINGTON – Sales of previously owned homes shot up in October by 6.1 percent to the third highest monthly level on record as house hunters scrambled to take advantage of low mortgage rates amid an uncertain economic climate. The big jump pushed sales of existing homes to a seasonally adjusted annual rate of 5.77 million, according to the National Association of Realtors. That tied with April as the third highest monthly level on record. October's performance, which followed a 2.6 percent advance in sales in September, exceeded analysts' expectations. They were forecasting a small dip in sales of existing homes for last month. Sales of existing homes are on track to post a record this year, the association says. Housing is one of the struggling economy's few bright spots. Home sales have held up well this year and during last year's recession because mortgage rates are so low. The average rate on a fixed-rate 30-year mortgage was 6.11 percent in October, up slightly from a record monthly low rate of 6.09 percent in September, and well below the 6.62 percent average rate seen in October 2001. The small creep up in mortgage rates in October probably prompted some people, concerned that mortgage rates might continue to edge up, to jump off the fence and lock in a deal, said David Lereah, chief economist for the National Association of Realtors. On Wall Street, stocks edged higher. The Dow Jones industrial average was up 11 points and the Nasdaq index gained 7 in morning trading. Low mortgage rates this year have been feeding a refinancing boom. The extra monthly cash consumers are saving by refinancing their mortgages at lower interest rates is helping to support consumer spending, which has been the main force keeping the economy going this year. These positive factors are helping to offset some negative ones, including the turbulent stock market, a lackluster job market and economic uncertainties, including a possible war with Iraq. Economists say that rising home values also are helping to support consumer spending. The national median price of an existing home – where half sell for more and half sell for less – rose to $159,600 in October, a 9.8 percent increase from October 2001. That marked the largest increase since July 1987. By region, in the Northeast sales of existing homes rose to a seasonally adjusted annual rate of 680,000, representing a 7.9 percent increase in October from the previous month. In the West, sales went up by 7.1 percent to a rate of 1.50 million, and in the South sales rose 5.5 percent to a rate of 2.31 million. For the Midwest, sales rose to a rate of 1.27 million, a 4.1 percent increase in October from September. Last week, the average rate on a 30-year mortgage moved up to 6.03 percent, after dropping to a new low of 5.94 percent the week before, according to Freddie Mac. The rate of 5.94 percent was the lowest since the mortgage giant began tracking 30-year mortgage rates in 1971. It also had marked the seventh time this year that rates on this benchmark mortgage hit a new low. "Right now there's very little pressure on interest rate to move much higher, so we'll have favorable affordability conditions for some time to come," said NAR President Cathy Whatley. Wanting to give the economic recovery an energy-boosting tonic, the Federal Reserve earlier this month cut a key interest rate by a bold, half a percentage point to a 41-year low of 1.25 percent. It marked the first rate reduction of this year and the 12th since January 2001.