Home Resales, Mortgage Rates Surpass Expectations in December - 2/2/2004 - Mortgage Loan Refinance Debt Equity

Home Resales, Mortgage Rates Surpass Expectations in December

Existing-home sales rose 6.9% in December to a seasonally adjusted annual rate of 6.47 million units.

David Lereah, the association’s chief economist, said that he continues to be surprised by the strength of the housing market.

“We’ve been expecting the pace of home sales to ease, and a decline in November seemed to indicate a more sustainable pace, but the rebound in December — the second highest monthly pace on record — shows there’s still a lot of life in this market,” he said.

“The biggest factor” behind the resurgence in sales, he observed, has been “a resumed decline in mortgage interest rates, which have been much lower than most analysts expected.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.88% in December, down from 5.93% in November. Mortgage rates have declined further in January.

NAR President Walt McDonald said that, “Given the demand from a growing number of households in an improving economy, we can expect sales to remain close to record activity this year.”

December’s rate of home resales was up 2.9% in the Northeast to 720,000 units, 5.3% in the South to 2.58 million units, 7.9% in the West to 1.77 million units and 9.4% in the Midwest to 1.39 million units.