Saturday, June 26, 2004

Pace of home sales slowing


Market's still topping last year's numbers, but higher interest having impact

Jeff McKinney
Enquirer staff writer

After two months of double-digit increases this spring, home sales for May slowed to 5.4 percent over May 2003 as mortgage interest rates inched up.

Sales of existing single-family homes for May in Southwest Ohio, Northern Kentucky and Southeast Indiana came in at 3,144, compared to 2,983 in May 2003, local Realtors reported Friday.

In March, sales in the region rose 27 percent, and in April they were up 13.7 percent when compared with the same two months in 2003.

Norman Miller, director of the Real Estate Program at the University of Cincinnati, said sales have peaked largely because of rising mortgage rates since March.

"What's happening is the procrastinators have already jumped into the market," Miller said.

Locally, the average fixed rate on a 30-year $100,000 mortgage hit 6.31 percent this week, according to the Cincinnati Area Board of Realtors. That rate was down slightly from 6.35 percent a week ago but up from 5.56 percent during the last week of March. The rate has been rising steadily since then.

The Federal Reserve is expected to raise interest rates next week, which indirectly affects mortgage rates.

Board of Realtors President Sandra Butler said the market is still strong despite the recent slight rise in rates and the smaller gain in May.

She said year-to-date sales in Southwest Ohio are up nearly 12 percent from the same period in 2003.

"We're more likely to see single-digit increases in monthly sales in upcoming months versus the double-digit increases we saw in the spring," Butler said. "But we still should have a record year."

Nationally, sales in May were the best (monthly) on record. Sales rose to a projected annual rate of 6.80 million, up 2.6 percent from 6.63 million in April and 15.8 percent higher than the 5.87 million sold in May 2003, the National Association of Realtors said.

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E-mail jmckinney@enquirer.com

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