Nov. 3, 2008 - Existing home sales improving

According to the National Association of Realtors®, existing-home sales increased last month as buyers responded to more favorable housing affordability conditions.

Existing-home sales -- including single-family, townhomes, condominiums and co-ops -- rose 5.5 percent to a seasonally adjusted annual rate of 5.18 million units in September from a level of 4.91 million in August, and are 1.4 percent higher than the pace in September 2007.

“The sales turnaround which began in California several months ago is broadening now to Colorado, Kansas, Minnesota, Missouri and Rhode Island,” said Lawrence Yun, NAR chief economist. “The South was hampered by much lower home sales in Houston in the aftermath of Hurricane Ike.”

NAR President Richard F. Gaylord of Long Beach, Calif., said low home prices and low interest rates have been attracting buyers. “This is the first time since November 2005 that home sales have been above year-ago levels,” he said. “Credit tightened at the end of September, but the improvement demonstrates that buyers who’ve been on the sidelines want to get into the market to make a long-term investment in their future.”

Total housing inventory at the end of September fell 1.6 percent to 4.27 million existing homes available for sale, which represents a 9.9-month supply at the current sales pace, down from a 10.6-month supply in August. This marks two consecutive monthly declines since inventories peaked in July. The national median existing-home price for all housing types was $191,600 in September, down 9.0 percent from a year ago when the median was $210,500.

The national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 6.04 percent in September from 6.48 percent in August, according to Freddie Mac.