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| Pending home sales are showing signs of leveling out, indicating that the housing market is stabilizing. The Pending Home Sales Index, based on contracts signed in February, slipped 0.8 percent to 117.7 and is 5.2 percent below February 2005. David Lereah, NAR’s chief economist, said most of the cooling in the housing market has already occurred, and a historically strong market can be expected moving forward. | |
| Existing-home rose in February following five months of decline. Total existing-home sales – including single-family, townhomes, condominiums and co-ops – increased 5.2 percent to a seasonally adjusted annual rate of 6.91 million units in February This was 0.3 percent below a year earlier. NAR analysts attributed some of the gain to mild weather. | |
| Home sales should generally level-out and remain at historically high levels, according to NAR forecasters. Economic growth and job creation are providing a favorable backdrop for the housing market, but rising interest rates have an offsetting effect, they said. Home sales will move up and down somewhat over the remainder of the year but still come up as the third strongest year on record. NAR expects the 30-year fixed-rate mortgage to rise to 6.9 percent by December. | |
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| Nearly 40 percent of all existing-home sales last year went to buyers of second homes. The annual report shows that 27.7 percent of all homes purchased in 2005 were for investment and another 12.2 percent were vacation homes. All together, the market share of second homes rose from 36.0 percent in 2004 to 39.9 percent in 2005. NAR Chief Economist David Lereah said the baby boom generation is driving second-home sales. Baby boomers are at the point in life when they want to diversify investments, they’re at the peak of their earnings and interest rates remain historically low, Lereah said. | |
| So, who are all those second-home owners, anyway? Find out in NAR’s 2006 Profile of Second-Home Owners, due to come out next month. Among the interesting factoids you'll learn are that the typical vacation home is 220 miles from the owner's primary residence and typical owners spent almost 40 nights in their vacation homes last year. Let's hope it didn't rain the entire time, Noah! | |
| Report compiled by NAR's Research Division.
NATIONAL ASSOCIATION OF REALTORS®
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