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Nationally, sales rose to the third-highest monthly pace on record, while the California real estate market showed a decline of 7.7 percent in sales from a year ago. The California market, however, recorded a double-digit increase in the median price of an existing single-family home.
David Lereah, chief economist for the National Association of Realtors, said home sales defy earlier expectations.
"The pace of home sales so far this year has been higher than projected, and we still expect sales activity to ease a little but to end this year with a new annual record," he said. "It all comes down to historically low mortgage interest rates, which have increased the purchasing power for a growing number of households."
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was a record-low 5.48 percent in May, down from 5.81 percent in April and 6.81 percent in May 2002; Freddie Mac started tracking interest rates in 1971.
Association President Cathy Whatley said interest rates should be close to bottom. "Over the last couple of weeks, the 30-year fixed-rate mortgage has been at 5.21 percent, which is the lowest weekly rate on record," she said.
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.
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