WASHINGTON – Sales of previously owned homes dipped slightly in October but still clocked in at fourth-highest pace on record, a fresh sign that the housing market is in solid shape.
The National Association of Realtors (search) reported Tuesday that sales, at a seasonally adjusted annual rate, totaled 6.75 million units in October, representing a tiny 0.1 percent decline from the previous month.
The pace of sales in October matched economists' expectations.
The housing market, aided by low mortgage rates, has been a constant bright spot for the economy. Analysts predict sales for all of 2004 will set new record highs.
The average monthly rate on a 30-year mortgage in October was 5.72 percent. That was down from 5.75 percent in September and considerably below 5.95 percent seen in October 2003.
"The ongoing stimulus of lower-than-expected mortgage interest rates was the primary driver of strong home sales in October," said David Lereah, the association's chief economist.
An improving employment climate also is helping to underpin home sales, Lereah said. In October, the economy added a sizable 337,000 jobs, the most since March. If payrolls gains are sustained going forward, that also should help support the housing market in the months ahead, Lereah said.
The median price of a previously owned home — half sell for more and half sell for less — was $187,000 in October, up 8.8 percent from the same month last year.
Wanting to make sure that inflation doesn't become a problem for the economy, Federal Reserve Chairman Alan Greenspan (search) and his colleagues earlier this month boosted short-term interest rates for a fourth time this year. A growing number of economists believe the Fed will push up rates again at its next meeting on Dec. 14.
By region, sales fell in all parts of the country except for the South, where they rose by 3.7 percent in October from September to a seasonally adjusted annual rate of 2.77 million.
In the Northeast, sales dropped by 1.3 percent to a rate of 750,000. In the Midwest, sales clocked in at a rate of 1.37 million, a 2.8 percent decline from September. Sales in the West fell by 3.6 percent to a rate of 1.86 million.