Existing Home Sales Slow
Nov. 28, 2005 — -- The National Association of Realtors says that the sales of existing homes slowed during October.
The industry group's monthly survey of the housing market shows that pre-owned homes sold at an annual rate of 7.09 million, below market expectations of 7.2 million. That's a 2.7 percent drop in the sales rate during the past 30 days. The median price for homes sold last month was $218,000 -- up $5,000 from the previous month.
"Housing activity has peaked and is coming down a bit, and we expect further cooling in the coming months," said David Lereah, the Realtors' chief economist. "We feel confident that housing is landing softly as rates continue to rise."
According to Freddie Mac, the average 30-year fixed-rate mortgage now comes with a 6.28 percent interest rate.
What does this mean? The market is slowing nationwide thanks to rising interest rates. The best proof of this? The nation's supply of homes for sale stands at 4.9 months. That's the highest level since June 2003.
"The price pressures remained spread across the entire market," economist Joel Naroff said. "The only concern is supply. It is soaring and that does not bode well for prices in the near future."
If supplies continue to expand -- which they likely will -- sellers will see less support for high prices, and homeowners who are not in the market to sell will likely see their homes' market value grow at a slower pace.
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