Resales Hit 2nd-Highest Level Ever

Existing-home sales rose 2.5% in April to the second-highest monthly rate ever as the expectation of rising mortgage rates contributes to a very strong spring homebuying season.The National Association of Realtors reported that sales of previously owned homes rose from a seasonally adjusted annual rate of 6.48 million units in March to 6.64 million in April. (The previous record rate of 6.68 million was set in September 2003.) NAR chief economist David Lereah told reporters that the strong sales number probably reflects "jumping" into the market by potential homebuyers to take advantage of low rates before the Federal Reserve Board starts raising interest rates. He said he expects home sales to start slowing in June but remain at healthy levels because of strong economic growth. He noted, however, that the inventory of unsold homes jumped 9.4% (from the March level) to 2.57 million in April, which was the second-highest number since August 1990. "At the current sales pace, it is not a problem," Mr. Lereah said. But it bears watching "if the sales rate slows appreciably," he added.