Chicago home sales of existing homes remain strong
Posted August 11, 2003
Chicago home sales of existing single-family homes eased slightly
last month but were still at one of the strongest levels on record,
according to the National Association of Realtors.
Existing-home Chicago home sales slipped 0.3 percent in June to
a seasonally adjusted annual rate of 5.83 million units from a downwardly
revised level of 5.85 million units in May. Last month's Chicago
home sales activity was 8.6 percent above the 5.37-million unit
pace in June 2002, and was tied for the fourth highest month on
Monthly Chicago home sales rates have been revised going back to
1989 using updated seasonal adjustment factors; there are no changes
to annual Chicago home sales totals or home price data.
David Lereah, NAR's chief economist, said low interest rates continue
to fuel the market. "The strong number of existing-home Chicago
home sales is consistent with high levels of mortgage applications,
new home Chicago home sales and housing starts," he said. "The
slight easing of Chicago home sales in June may reflect some weakness
in the labor markets, but historically low mortgage interest rates
are helping new households to afford homes and allow existing owners
to sell their homes and purchase another - this is the primary reason
we expect a new Chicago home sales record this year."
According to Freddie Mac, the national average commitment rate
for a 30-year, conventional, fixed-rate mortgage was a record low
5.23 percent in June, down from 5.48 percent in May. It was 6.65
percent In June 2002. Freddie Mac started tracking mortgage interest
rates in 1971.
NAR President Cathy Whatley, owner of Buck & Buck Inc. in Jacksonville,
Fla., said the timing of low interest rates coincides with strong
housing demand by young households as well as immigrants and minorities.
"Echo boomers - the children of the baby boom generation -
are entering the age for buying a first home," she said. "In
fact, four out of 10 buyers are purchasing their first home, which
is providing liquidity to sellers that in turn boost other sectors
of the market."
Housing inventory levels improved at the end of June and rose 5.9
percent from May to a total of 2.50 million existing homes available
for sale, which represents a 5.1-month supply at the current Chicago
home sales pace. "The supply of homes on the market is a little
closer to balance, but continues to favor sellers and is supporting
strong price appreciation," Lereah said.
The national median existing-home price was $176,500 in June, up
7.7 percent from June 2002 when the median price was $163,900. The
median is a typical market price where half of the homes sold for
more and half sold for less.
Regionally, the existing-home Chicago home sales pace in the West
rose 3.2 percent from May to an annual rate of 1.60 million units
in June, and was up 11.1 percent from June 2002. The median existing-home
price in the West was $242,600, up 10.1 percent from the same month
a year earlier.
Home resale activity in the South was unchanged in June, holding
at an annual rate of 2.29 million units, and was 7.5 percent above
a year ago. The median price of an existing home in the South was
$166,400, which was 6.7 percent higher than June 2002.
Homes in the Midwest were reselling at an annual rate of 1.29 million
units in June, 3.0 percent below May but 10.3 percent higher than
June 2002. The median price in the Midwest was $147,300, up 7.0
percent from a year ago.
Existing-home Chicago home sales in the Northeast dropped 4.4 percent
from May to a pace of 650,000 units in June, but were 3.2 percent
above the same month a year earlier. The median existing-home price
in the Northeast was $188,900, up 11.9 percent from June 2002.