Existing Home Sales Rise 2.9%, Hit Highest Level Since ’79
Sales of existing single-family homes last year hit their highest level since 1979 as buyers shopped in lower price ranges rather than leave the market when costs rose, a real estate trade group said Wednesday.
The National Assn. of Realtors said 3.63 million homes were sold in 1988, up 2.9% from 1987 when 3.53 million homes had been sold. It was the highest sales volume since 3.83 million homes were sold in 1979.
Sales shot up 11.4% in December to a seasonally adjusted annual rate of 4.09 million units. It was the highest month-to-month increase since an 11.6% rise in April, 1986.
“For the most part, people seem to be buying less expensive homes,” said Ira Gribin, president of the realtors group. “The demand is there. People still appear to be going for the most they can afford. They just can’t afford as much.”
December’s increase in sales was led by a 15.8% increase in the South, where sales rose to a seasonally adjusted annual rate of 1.61 million homes.
In the West, sales rose 4.5% to 690,000 units, and sales were up 4.4% in the Northeastto 710,000 dwellings.
Home prices slipped slightly to $87,700 in December, compared to a median sales price of $88,000 in November. Prices averaged $89,100 for all of 1988, a 4.1% increase from the previous year, when the median sales price was $85,600.
“The strong sales volume of December, combined with a decline in prices from November and overall modest price increases for the year, suggest that the demand for home ownership is being fulfilled at the lower end of the market,” said John Tuccillo, chief economist for the realtors group.
He predicted similar buying patterns this year, but cautioned that with mortgage interest rates expected to continue rising, “economic conditions are not favorable to draw a large volume of sales.”