Second-Quarter Existing Home Sales Soften

Existing-home sales, including single-family and condo, were down in the second quarter in contrast with a record set in the same period in 2005. Despite the overall decline, 20 states showed increases in sales activity from a year ago, according to the National Association of Realtors (NAR).

The quarterly report on total state existing-home sales shows that the seasonally adjusted annual rate was 6.69 million units in the second quarter, down 7 percent from the record 7.19 million-unit level in the second quarter of 2005.

The biggest increase was in Alaska, where existing-home sales rose 48.6 percent from the second quarter of 2005. In Arkansas the second-quarter resale pace rose 17.9 percent from a year earlier, while Texas experienced the third strongest gain, up 11.3 percent. Twenty-eight states and the District of Columbia experienced declines. Complete data for two states was not available.

David Lereah, NAR’s chief economist, said two sets of market conditions are apparent in the report. “When you look at states with high housing costs or that have experienced a prolonged period of rapid price gains, you typically see slower home sales,” he said. “By contrast, states with moderately priced areas that have experienced healthy job creation are seeing sales gains — the economic backdrop remains favorable for the housing market, which is helping home sales to level out.”

According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage was 6.6 percent in the second quarter, up from 6.24 percent in the first quarter; it was 5.72 percent in the second quarter of 2005.

NAR President Thomas M. Stevens from Vienna, Va., said interest rates have been trending down in recent weeks. “This is good news for buyers who have been on the sidelines; now there is a window of opportunity in the market,” said Stevens, senior vice president of NRT Inc.