Existing Home Sales Hit 2nd-Best Rate in 6 Years

Sales of existing homes climbed 1.2% in October to the second-highest level in the last six years, a real estate trade group said Monday.

Existing single-family homes were sold at an annual rate of 3.49 million units last month, with lower mortgage rates given much of the credit for the strong sales pace, the National Assn. of Realtors said.

Sales had hit 3.5 million units in August, the highest annual rate since October, 1979, when previously owned homes were sold at an annual rate of 3.77 million units.

“Increasingly, home buyers are finding that these are good times to satisfy their housing needs,” said Clark E. Wallace, president of the association.

Mortgage rates for the week ending last Friday dropped to 11.64% for fixed-rate mortgages, the lowest level in six years, according to a survey of commitment rates released Monday by the Federal Home Loan Mortgage Corp. Mortgage rates have been falling for more than a year after hitting a peak of 15.2% in July, 1984.

The October sales rate was 27.4% higher than the pace a year ago. Sales had shot up 11.5% in August but declined a slight 1.5% in September.

The realtors group noted that home sales have been above the 3-million-unit mark for eight consecutive months, something that has not occurred since 1976-79.

By region, sales showed the biggest improvement in the West, rising 7%, followed by a 4.3% advance in the Northeast.

After falling for two months, the median price of an existing home rose $100 in October to $75,600, putting the price 5.1% higher than a year ago.

In a related report, the California Assn. of Realtors said that sales of existing single-family homes advanced 17.6% in October to their second-highest annualized level of the year.

In October, existing single-family home transactions reached a five-month high of 450,082 units, up from 382,691 units in September. According to the association’s statistics, the median price of existing single-family homes has increased 9.9% in the last 12 months, the fastest rate of home price appreciation since the late 1970s.

In October, resale homes posted a median sales price of $122,465, down 1.1% from September’s $123,844 sales price but up significantly from $111,395 in October, 1984, the association reported.