Low Rates Drive Record Home Sales
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Sales of existing homes in America rose to a record in the fourth quarter, driven by mortgage rates near a record low, the National Association of Realtors said.
Sales of single-family homes rose to a seasonally adjusted annual pace of 6.61 million in the three months through December, an economist for Washington-based NAR, Lawrence Yun, said in a telephone interview yesterday. Home prices appreciated at the second-fastest rate in 23 years, he said.
Thirty-year fixed mortgage rates averaged 5.8% in 2004, matching the 38-year low of 2003, Mr. Yun said. Most economists had expected financing costs to rise as the American economy improved, Mr. Yun said.
“The interest rate has refused to move up, and now we are in a job-creating economy, so we have the best of both worlds,” Mr. Yun said.
The median home price rose 8.8% to a record $182,500 from a year earlier, said NAR, the industry’s largest trade group.
That was the second-highest quarterly increase since the 9.4% gain in the first quarter of 1981, Mr. Yun said.
