Sales of Existing Homes Up 1.2% in July, Realtors Say

Sales of existing homes rose 1.2% in July, posting the first back-to-back increase after high mortgage rates produced consecutive declines in the first five months of 1989, a real estate trade group reported today.

The National Assn. of Realtors said sales of existing single-family homes sold at a seasonally adjusted annual rate of 3.40 million units in July, up from June’s revised 3.36 million units.

June’s increase was the first in sales since December, 1988, and the largest since December, 1986, when sales jumped 6.6%.

“The downswing in (mortgage interest) rates is pulling some buyers off the sidelines,” said NAR President Ira Gribin.

The Federal Home Loan Mortgage Corp. reported that average fixed-rate mortgages fell from 10.03% to 9.81% during July.

The realtors also reported that the median price of a home rose $3,000 to $96,400, a 3.2% increase over June and 6.3% over the previous year.

The median price reflects the dominance of higher-priced home sales, said NAR chief economist John A. Tuccillo, and “a relatively low volume of sales in the lower-priced starter range.”

“The loss of the entry-level buyer is taking a bite out of the market,” Gribin added.

But while the July increase in sales was small, said Lyle Gramley, chief economist for the Mortgage Bankers Assn. of America, “taken in the context of all other recent economic indicators, it’s got to be encouraging. I think we’ll see more moderate rises as the year goes on.”

Regionally, sales were led in the Northeast, where the resale pace rose 9.8% to 560,000 units. Next was the South, which recorded a 3.1% increase to 1.32 million units.

In the West, however, sales fell 5% to 570,000 units. Sales also dropped in the Midwest, 5.2% to 910,000 units.

Median prices were $147,000 in the Northeast, $88,200 in the South, $138,200 in the West and $73,500 in the Midwest.