Suburban Chicago sales of existing homes remain strong
Posted August 11, 2003
Suburban Chicago sales of existing single-family homes eased slightly
last month but were still at one of the strongest levels on record,
according to the National Association of Realtors.
Existing-home Suburban Chicago sales slipped 0.3 percent in June
to a seasonally adjusted annual rate of 5.83 million units from
a downwardly revised level of 5.85 million units in May. Last month's
Suburban Chicago sales activity was 8.6 percent above the 5.37-million
unit pace in June 2002, and was tied for the fourth highest month
on record.
Monthly Suburban Chicago sales rates have been revised going back
to 1989 using updated seasonal adjustment factors; there are no
changes to annual Suburban Chicago sales totals or home price data.
David Lereah, NAR's chief economist, said low interest rates continue
to fuel the market. "The strong number of existing-home Suburban
Chicago sales is consistent with high levels of mortgage applications,
new home Suburban Chicago sales and housing starts," he said.
"The slight easing of Suburban Chicago sales in June may reflect
some weakness in the labor markets, but historically low mortgage
interest rates are helping new households to afford homes and allow
existing owners to sell their homes and purchase another - this
is the primary reason we expect a new Suburban Chicago sales record
this year."
According to Freddie Mac, the national average commitment rate
for a 30-year, conventional, fixed-rate mortgage was a record low
5.23 percent in June, down from 5.48 percent in May. It was 6.65
percent In June 2002. Freddie Mac started tracking mortgage interest
rates in 1971.
NAR President Cathy Whatley, owner of Buck & Buck Inc. in Jacksonville,
Fla., said the timing of low interest rates coincides with strong
housing demand by young households as well as immigrants and minorities.
"Echo boomers - the children of the baby boom generation -
are entering the age for buying a first home," she said. "In
fact, four out of 10 buyers are purchasing their first home, which
is providing liquidity to sellers that in turn boost other sectors
of the market."
Housing inventory levels improved at the end of June and rose 5.9
percent from May to a total of 2.50 million existing homes available
for sale, which represents a 5.1-month supply at the current Suburban
Chicago sales pace. "The supply of homes on the market is a
little closer to balance, but continues to favor sellers and is
supporting strong price appreciation," Lereah said.
The national median existing-home price was $176,500 in June, up
7.7 percent from June 2002 when the median price was $163,900. The
median is a typical market price where half of the homes sold for
more and half sold for less.
Regionally, the existing-home Suburban Chicago sales pace in the
West rose 3.2 percent from May to an annual rate of 1.60 million
units in June, and was up 11.1 percent from June 2002. The median
existing-home price in the West was $242,600, up 10.1 percent from
the same month a year earlier.
Home resale activity in the South was unchanged in June, holding
at an annual rate of 2.29 million units, and was 7.5 percent above
a year ago. The median price of an existing home in the South was
$166,400, which was 6.7 percent higher than June 2002.
Homes in the Midwest were reselling at an annual rate of 1.29 million
units in June, 3.0 percent below May but 10.3 percent higher than
June 2002. The median price in the Midwest was $147,300, up 7.0
percent from a year ago.
Existing-home Suburban Chicago sales in the Northeast dropped 4.4
percent from May to a pace of 650,000 units in June, but were 3.2
percent above the same month a year earlier. The median existing-home
price in the Northeast was $188,900, up 11.9 percent from June 2002.
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