David Lereah, NAR's chief economist, said all the factors necessary for a healthy housing market remain in place. "Strong market fundamentals—including low mortgage interest rates, a growing population and an unemployment rate below 6 percent—mean we have all the necessary factors for home sales activity to be near historic highs," he said.

According to Freddie Mac, the average commitment rate on a 30-year conventional fixed-rate mortgage was 6.29 percent in the third quarter, down from 6.82 percent in the second quarter; it was 6.97 percent in the third quarter of 2001. Last quarter's average interest rate was the lowest since the Freddie Mac series began in 1971.

NAR President Cathy Whatley said changes at the state level are relative. "Even in states that posted sales declines, the overall level of home sales activity in most areas remains fairly high in historic terms," she said. "We'd be hard-pressed to find any areas of obvious weakness. We can only point to relative changes from unprecedented levels in recent sales activity."

The strongest year-to-year increase was in Hawaii, where the third-quarter resale pace was 20.3 percent above the third quarter of 2001. Next came Arkansas, which rose 20.2 percent from a year ago. Nevada posted the third-highest increase, up 20.0 percent from last year's third-quarter rate.

California, which had a third-quarter resale rate of 2.3 percent, made the list of states posting increases.

Information provided in this column is presented by the Realtor members of the Silicon Valley Association of Realtors at www.silvar.org. Send questions on any topic to jnewton@jnpr.com.