Home Resales Rise a Strong 7% in August

Sales of existing homes jumped 7% in August to an annual rate of 3.69 million units, the fastest sales pace of this decade, a real estate trade group reported Thursday.

The National Assn. of Realtors said its monthly survey found that declines in mortgage rates helped spur sales in August following a smaller 1.8% increase in July.

The increases pushed the annual rate of sales to its highest level since October, 1979, when a yearly pace of 3.77 million units was recorded.

All areas of the country shared in the increase in sales. The West led with a 20.3% jump, followed by an 8.4% increase in the Midwest, a 6% gain in the Northeast and a 2.4% rise in the South.

Fixed-rate mortgage interest now averages just over 10%, down by almost 1.5 percentage points from a year ago and more than 5 points below the peak levels hit in 1981 and 1982.

3.4 Million Annual Sales Seen

“The favorable interest rate situation, reductions in time lags for mortgage approvals and the reasonable certainty that homeownership will remain relatively unscathed under the tax reform package . . . are encouraging many families to get into the home buying market,” said Clark E. Wallace, president of the association.

The realtors group forecast that sales of existing homes for the entire year would total 3.4 million units, up 6.5% from last year. But the group predicted that sales would edge down slightly in 1987.

While sales were rising, the median price of a home fell in August by $300 to $80,000. It was the third consecutive monthly decline, but it still left the median home price 3.6% higher than a year ago. The median price means half the nation’s homes sold for more and half for less.

In California, the median price of an existing single-family home in August was $136,125, $992 lower than the July median but up $15,476 from the August, 1985, median price of $120,649, the California Assn. of Realtors reported.

The median price of a home in the Los Angeles area was $134,371, unchanged from July’s but up from $125,133 a year earlier, while in the Orange County area the median price was $146,702, up from $139,928 in August, 1985.