Sales of existing homes held steady with a modest gain in October, another indicator that the housing market is transitioning into a more normal market in contrast with unsustainable activity last year.

Total existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 0.5 percent to a seasonally adjusted annual rate of 6.24 million units in October from an upwardly revised pace of 6.21 million in September, but were 11.5 percent below the 7.05 million-unit level in October 2005.

David Lereah, NAR’s chief economist, said market fundamentals are improving. “The present level of home sales demonstrates some confidence in the market, but sales are lower than sustainable due to psychological factors,” he said. “The demographics of our growing population, historically low and declining mortgage interest rates, and healthy job creation mean the wherewithal is there to buy homes in most of the country, but many buyers remain on the sidelines. After a period of price adjustment, we’ll see more confidence in the market and a lift to home sales should be apparent in the first quarter of 2007.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.36 percent in October, down from 6.40 percent in September; the rate was 6.07 percent in October 2005.



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