Existing-Home Sales Still High Despite Dip
Americans bought fewer previously occupied homes in June, but sales were still at near-record levels, suggesting that this main pillar of the economy remains sturdy.
The National Assn. of Realtors reported Wednesday that existing-home sales dipped by 0.6% in June to a seasonally adjusted annual rate of 5.33 million, matching the fifth-highest level on record registered in December 1998.
“This is the housing boom that just won’t go away,” said economist Ken Mayland of ClearView Economics. “Housing is providing a firm foundation for sustaining the surprisingly robust trend of consumer buying, and the tax rebate checks, some of which are now in taxpayers’ hands, are the icing on the cake.”
On Wall Street, stocks rebounded. The Dow Jones industrial average closed up 164.55 points at 10,405.67, recovering nearly half the 335 points it had lost earlier this week.
Economists said that consumer spending, which accounts for two-thirds of all economic activity, and the housing market have held up well during the yearlong economic slowdown and have been forces preventing the economy from tipping into recession.
“No matter what is happening around them, households remain so confident that they are still buying homes at a near-record pace,” said Joel Naroff, president of Naroff Economic Advisors.
June’s existing-home sales performance was better than many economists predicted. They had forecast a 1.5% drop in sales because of the weak labor market, volatile stock market and the fact that mortgage rates rose slightly from May to June.
The average rate on a 30-year fixed-rate mortgage in June was 7.16%, up from 7.15% in May, but well below the 8.29% posted in June 2000.
In May, sales jumped by 2.7% to a rate of 5.36 million, the third-highest level on record. Even with the decline, June’s rate of 5.33 million was close to that mark.
Existing-home sales reached an all-time high of 5.45 million in June 1999, when the economy was booming.
In June, sales of previously owned homes were down in all regions of the country except in the West, where sales were up 6.6%.
Sales fell 4.2% in the Midwest, 2.3% in the South and 1.5% in thee Northeast.
The median existing-home sales price, meaning half sold for more and half for less, rose to a record $152,600 in June, up 8.8% from the median price for the same month a year ago. Home prices have remained strong throughout the economic slowdown.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Existing-Home Sales
Seasonally adjusted annual rate, in millions of units:
*
June: 5.33 million
Source: National Assn. of Realtors
