Flooring News and Information

Washington, DC, Oct. 26—Existing single family home sales fell in September as the nation reacted to the attack on America, according to the National Association of Realtors. Existing home sales dropped 11.7% to a seasonally adjusted annual rate of 4.89 million units in September from an upwardly revised pace of 5.54 million units in August, which was an all time record. Last month's sales activity was 5.2% below the 5.16 million unit pace in Septemberof last year.

Dr. David Lereah, NAR's chief economist, said a falloff was expected. "Considering the nation essentially came to a halt during the week of the attack, we knew there would be a hit on home sales activity," he said. "However, our in house tracking of major brokers across the country shows sales activity making some recovery, which demonstrates that the underlying demand and fundamentals of the market remain strong," he added. NAR projects total sales for this year at 5.19 million, an increase of 1.3% from 2000, which will be the second highest total for existing home sales on record.

NAR president Richard A. Mendenhall said affordability conditions continue to improve. "There are a couple bright spots to note in the current market—one is the continued decline in mortgage interest rates, which are close to the lowest level since the 1960s. Another positive factor is an increase in the supply of homes on the market, which is creating a more balanced market now between buyers and sellers," he said. "This means that buyers are less likely to find themselves in competitive bidding situations.”

Housing inventory levels at the end of September dropped 0.5% from August to a total of 2.19 million existing homes available for sale, which represents a 5.4 month supply at the current sales pace; there was a 4.8 month supply at the end of August. The September inventory level is 10.1% higher than September 2000, when 1.99 million homes were on the market, which represented a 4.6 month supply. The national median existing home price was $148,100 in September, up 4.6% from September 2000 when the median price was $141,600.

Lereah notes the September price is below August, but this is a normal seasonal occurrence. "It's inappropriate to read anything into this month to month change as a result of seasonal buying patterns—every year since record keeping began, the median price has dropped in the fall because there is a higher ratio of singles and childless couples who are generally purchasing more moderately priced homes—families with children, who buy more expensive homes, typically close by the end of summer due to school year considerations," he explained. "As a consequence, the only valid comparisons for median home prices are with the same period a year earlier."

Regionally, existing homes in the Midwest were selling at an annual rate of 1.08 million units in September, down 9.2% from August; the pace was 3.6% below the same period last year. The median price in the Midwest was $131,000, up 2.6% from last September. The existing home sales pace in the South fell 11.5% in September to an annual rate of 1.93 million units, and were 2% below September 2000. The median price of an existing home in the South was $136,800, which was 5.1% higher than a year ago. Home resales in the West dropped 12.2% in September to an annual rate of 1.29 million units, and were 10.4% below September 2000. The median existing home price in the West was $200,600, up 8.3% from the same month a year earlier. Existing home sales in the Northeast fell 14.5% in September to a pace of 590,000 units; the sales rate was 7.8% below September 2000. The median existing home price in the Northeast was $140,300, up 3.4% from a year ago.