- The Washington Times - Tuesday, August 23, 2005


Sales of previously owned homes fell in July as some house hunters were put off by galloping prices, but the pace of sales was still the third-highest ever, suggesting the market isn’t cooling much.

The latest snapshot of activity in the housing market released by the National Association of Realtors yesterday showed that July sales of existing homes — including single-family homes, town houses and condominiums — totaled 7.16 million units at a seasonally adjusted annual rate.

That represented a 2.6 percent decline from June’s record-high pace of 7.35 million units.

Soaring home prices and, to a lesser extent rising mortgage rates, played a role in July’s drop in sales — making it more difficult for some house hunters to take the leap into homeownership, analysts said.

“Some people are being turned off by the high house prices, and they just can’t pull the trigger,” said Joel Naroff, president of Naroff Economic Advisors. “Without question, that’s causing some people to think twice about buying.”

The median sales price of an existing home in July climbed to a record $218,000. That was up a sizable 14.1 percent from a year ago. The median price is the price that half of the homes sell for more than and half sell for less than.

Looking at individual regions, the median house price in July compared with a year ago went up the most in the West, by 16 percent. That was followed by a 13.1 percent jump in the Northeast, an 11.9 percent rise in the Midwest and a 7.5 percent pickup in the South.

Federal Reserve Chairman Alan Greenspan has talked about “speculative fervor” in some local housing markets that may be pushing prices up to unsustainable levels.

The Fed chief also has warned people about stretching to buy expensive homes using risky interest-only mortgages and other exotic home loans that are increasing in popularity.

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