By Times Staff and Wire Reports
Published September 26, 2003
Combined U.S. sales of new and previously owned homes rose to the highest on record in August, even as mortgage interest rates continued to climb from record lows.
Tampa Bay area real estate agents said they expect the local market to remain strong, despite rising interest rates.
"I've already passed last year, and last year was a record year," said Dick Sells, a Realtor at ReMax Action First, with offices in Palm Harbor, Clearwater Beach and St. Petersburg. "I don't see a turn down in the market at all and, as a matter of fact, I still see a continuing upswing."
Nationwide, new single-family home sales rose 3.4 percent to a 1.15-million annual rate in August from a revised 1.112-million pace in July, the Commerce Department said Thursday. Sales of previously owned homes climbed to a seasonally adjusted annual rate of 6.47-million units, up 5.5 percent from an upwardly revised 6.13-million in July and up 21.8 percent from the 5.31-million unit pace in August 2002, according to the National Association of Realtors.
The combined August pace of 7.62-million surpassed the previous high of 7.242-million reached a month earlier.
The Florida housing market also stayed hot in August, with sales of previously owned homes surging from a year earlier.
In August, 19,787 previously owned single-family homes were sold, up 19 percent from 16,595 a year earlier, according to the Florida Association of Realtors. The statewide median sale price rose to $163,600, up 13 percent from $144,200 during the same period, the association said.
The Tampa-St. Petersburg-Clearwater market recorded 3,137 homes sold in August, up 24 percent from a year earlier, while the median sale price rose 9 percent to $149,000, the association said.
A national economy that's projected to grow twice as fast in the last half of the year as it did in the first six months may help underpin housing by spurring income growth, economists said. Mortgage rates, while up from June's record-low 5.21 percent, are lower than they were last year.
The rate on a fixed 30-year mortgage averaged 6.26 percent in August, up from 5.63 percent in July, according to figures from Freddie Mac, the No.2 buyer of U.S. mortgages. The rate averaged 6.54 percent last year.
"Some of the home sales closed in August were negotiated in June when mortgage interest rates hit record lows," said David Lereah, chief economist of the National Association of Realtors. "Much of the remaining portion of sales reflect quick decisions to make offers in July when interest rates began to rise sharply."
But Lereah also observed that, "as the economy gains momentum, consumers should have the wherewithal" to continue buying.
A total of 1.023-million new homes will be sold this year, surpassing 2002's record 974,000, according to projections from the National Association of Home Builders.
"We have very strong expectations" for the rest of the year and 2004, said Joel Rassman, chief financial officer at Toll Brothers Inc., the largest U.S. builder of luxury homes. The Huntingdon Valley, Pa., company had a record 4,411 homes in backlog in its fiscal third quarter. It typically takes 9 or 10 months for Toll to fill an order, he said.
New homes account for 15 percent of all home sales. Sales of previously owned homes account for the rest. Homebuilding contributes 5 percent of gross domestic product and adds to growth by creating jobs and encouraging spending on appliances, building materials and home furnishings.
- Times staff writer Louis Hau contributed to this report, which used information from Bloomberg News.
