Archive for Tuesday, November 26, 2002

Home sales surge

Market on track to reach record

November 26, 2002

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— Sales of previously owned homes registered their third best month on record in October and are on track for a record this year, as the beacon of low mortgage rates turns house hunters into home buyers.

The National Association of Realtors reported Monday that existing-home sales climbed to a seasonally adjusted annual rate of 5.77 million in October, representing a 6.1 percent jump from the previous month.

October's performance, which followed a 2.6 percent advance in sales in September, exceeded analysts' expectations. They were forecasting a small dip in last month's sales.

Housing has been a pillar supporting the economy this year as it struggled to get back to full health after being knocked down by last year's recession.

"With mortgage rates dropping to more than 30-year lows, people are viewing this as a home-buying bonanza, " said Stuart Hoffman, chief economist at PNC Financial Services Group. "This makes the housing market one of the brightest spots in an otherwise dull economy."

The uneven economic recovery is a source of apprehension for the Federal Reserve and President Bush, whose economics team is pondering what more can be done to help the economy.

"The economy is growing in fits and spurts, not as fast as the president would like it to," said White House spokesman Ari Fleischer. "I won't preface or guess what the president is going to propose, if he might propose anything on this."

The president, Fleischer said, remains concerned about anemic job growth.

Home sales in Douglas County increased for both the month and the year during October. According to numbers compiled by the Douglas County Appraiser's office, 134 homes were sold in the county during October. That's up from 125 in September and 99 in October 2001. The average sale price of homes was $166,317, up about $12,000 from a year ago.

Wanting to energize the economy, the Fed cut a key interest rate this month by a bold half a percentage point, the first rate reduction this year.

Although many analysts believe the economy has lost momentum in the current October-December quarter, they said Monday's report reinforced their belief that the country will avoid a return to recession.

October's brisk 5.77 million sales pace tied with April's as the third highest monthly level on record. Existing-home sales for all of 2002 are expected to shatter the record set last year, the association said.

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