- The Washington Times - Tuesday, August 24, 2004


Sales of previously owned homes declined in July but still posted their third-best pace on record — a sign that the housing market, while slowing a bit, remains in good shape.

The National Association of Realtors reported yesterday that sales of existing homes fell to a seasonally adjusted annual rate of 6.72 million units, representing a 2.9 percent decrease from June’s record-high pace of 6.92 million units.

Even though the drop in July was steeper than the 2 percent decline some economists were forecasting, the level of sales was still considered buoyant. July’s sales were running 8.6 percent higher than the pace for the same month last year.

“We’re off the highs, but the levels we are at are very, very healthy,” said David Lereah, the association’s chief economist. He expects sales of previously owned homes to reach new highs for all of 2004.

Richard Yamarone, an economist at Argus Research Corp., agreed with that assessment, saying he has no worries about the health of the housing market. “Here we are with the third-greatest pace in existing home sales. In the Olympics, third place would get you a bronze medal.”

Mr. Lereah said sales dropped because their blistering pace in June couldn’t be sustained. Some economists said the sluggish job climate in July and high energy prices also may have played a role in the sales decline.

President Bush and Democratic presidential nominee Sen. John Kerry, have sparred frequently about the health of the U.S. economy and the availability of jobs. Job growth slowed dramatically in July, with payrolls expanding by 32,000, the smallest gain since December.

The decrease in existing-home sales in July came despite a recent fall in mortgage rates.

The average rate on a 30-year fixed-rate mortgage was 6.06 percent in July, down from 6.29 percent in June. Still, rates in July were higher than a year ago.

Last week, rates on 30-year mortgages dropped to 5.81 percent, part of a downward drift as economic activity slowed in the spring and early summer.

In the South, existing-home sales rose by 0.4 percent in July from June to an annual rate of 2.77 million units. In the Northeast, however, sales fell by 1.4 percent to a pace of 730,000. In the Midwest, sales dropped by 4.8 percent to an annual rate of 1.39 million and in the West, they went down by 6.6 percent to a rate of 1.83 million.

The median price of a previously owned home — where half sell for more and half sell for less — was $191,300 in July, up 8.7 percent from the same month last year. The price increase reflected the tight availability of saleable houses, economists said.

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