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DECEMBER HOME SALES SOAR AS CONSUMERS CONFIDENCE IMPROVES

 WASHINGTON, Jan. 26 /PRNewswire/ -- Sales of previously owned homes soared in December to the highest level in more than a decade, reflecting a boost in consumer confidence, according to the National Association of Realtors.
 The association recorded a seasonally adjusted annual sales rate(A) of 4.02 million existing single-family homes last month, up 21.5 percent from December 1991, when the resale rate was 3.31 million units. The December rate was the highest since May of 1979, when the rate hit 4.09 million units.
 The home sales report followed the release last week of federal government data showing a similar increase in home construction for December.
 According to NAR President William S. Chee, the flood of housing activity last month indicates that consumers are more convinced that the economy is rebounding. "Buyers are out in force. They're making up for lost time," Chee said. The increase in sales reflects purchases by both entry-level buyers and those trading up to larger homes, he noted.
 Low mortgage rates are continuing to make home ownership very affordable. The Federal Home Loan Mortgage Corp. reported that the national average commitment rate for 30-year, conventional, fixed- rate mortgages was 8.22 percent in December, down from 8.31 percent the previous month, and down from 8.50 percent in December 1991. NAR is predicting that mortgage rates will slip further in the months ahead. "It looks as though financing is going to stay very favorable, which should draw a lot of prospects who haven't made their move," Chee said.
 Last month's national median existing single-family home price was $103,900, which was 3.6 percent higher than one year earlier, when the price was $100,300. The median is the midpoint in the price range -- half the homes sold cost more, half cost less. The year-to- year price increase is indicative of steady demand, Chee noted.
 For 1992 as a whole, the median price for existing single-family homes was $103,600, rising 3.3 percent from 1991.
 NAR Chief Economist John A. Tuccillo noted that home prices are not likely to jump as quickly over the next few years as they did in the 1980s. "There will always be exceptions, but, in general, the market has changed. Prices will remain much more in line with consumers' incomes," Tuccillo said.
 There were 3.50 million existing single-family homes sold in 1992, which was 8.7 percent higher than the total for 1991. The 1992 total was the highest since 1988, when the total was 3.51 million. Tuccillo noted that the 3.50-million mark is considered to be an "economic threshold" -- the point at which home sales make a definitive impact on the economy, in terms of jobs created and spin- off sales of construction materials, furniture, appliances and other items.
 December's flurry of home buying activity spread from coast to coast. All of the regions posted extraordinary year-to-year increases in existing single-family home sales. In the Northeast, the pace for December was 630,000 units, up 26.0 percent from December 1991. The median price for existing single-family homes in the Northeast was $135,600 last month, down 1.2 percent from one year earlier. For the year as a whole, existing-home sales totalled 534,000 units in the Northeast, which was 11.5 percent above the total for 1991. The 1992 median home price for the Northeast was $140,000, down 1.3 percent from 1991.
 The resale rate in the Midwest was 1.04 million units in December, which was up 20.1 percent from one year earlier. The median existing-home price in the Midwest was $81,500, up 4.2 percent from December 1991. Resales totalled 942,000 units in the Midwest in 1992, rising 12.1 percent from one year earlier. The 1992 median home price in the Midwest was $81,700, which was 5.0 percent above the 1991 price.
 The South posted a resale rate of 1.49 million units in December, up 20.2 percent from the December 1991 pace. The region's median price was $92,600 last month, up 3.6 percent from one year earlier. The 1992 resale total for the South was 1.273 million units, up 6.2 percent from 1991. The 1992 median home price for the South was $92,100, which rose 3.6 percent from 1991.
 The resale rate for the West was 850,000 units in December, 18.1 percent above that for December 1991. The median price in the West was $142,600 last month, down 0.4 percent from December 1991. The 1992 resale total for the West was 750,000 units, which was 6.8 percent higher than the 1991 total. The median price in the West for 1992 was $143,600, which was 2.4 percent below that for 1991.
 The National Association of Realtors, "The Voice for Real Estate," is the nation's largest trade association, representing nearly 750,000 members involved in all aspects of the real estate industry.
 (A) The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume normally is higher in the summer than in the winter, primarily because of differences in the weather.
 -0- 1/26/93
 /CONTACT: Trisha Morris, 202-383-7560, Rose Matthews, 202-383-1135, or Walter Molony, 202-383-1177, all of the National Association of Realtors/


CO: National Association of Realtors ST: District of Columbia IN: SU: ECO

DS -- DC003 -- 8919 01/26/93 08:47 EST
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Date:Jan 26, 1993
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