Home sales rise an unexpected 2.5 percent

By Sue Kirchhoff
USA Today

WASHINGTON — Existing home sales jumped a surprising 2.5 percent in April to the second-highest monthly sales rate on record as consumers rushed to beat rising mortgage rates, the National Association of Realtors said yesterday.

"I'm very bullish," says Van Davis, CEO of Century 21 Real Estate, adding he expects sales to remain strong throughout the year, given high demand, a tight inventory and 30-year mortgage rates that, while up nearly a percentage point since March, are still historically modest at about 6.2 percent.

The housing market once again exceeded expectations, as sales of previously owned homes in April hit a 6.64 million seasonally adjusted annual rate. Sales were up more than 15 percent from April 2003, and the median price, at $176,000 was 7.3 percent higher than a year ago. The April figure was close to the monthly record rate of 6.68 million in September 2003, surprising economists, who had expected a dip in sales.

The median home price in the Northeast was $214,100, up 19.3 percent from a year ago, while the West's median price of $257,300 was 11.5 percent above last year. In the Midwest, the median was $143,200, up 5.3 percent and the South's $162,900 median reflected a 7 percent price rise.

Economists said many of the sales recorded in April took place earlier, before the full run-up in mortgage rates.

But anecdotal evidence and the pace of mortgage applications in May suggest the market remains pretty strong.