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U.S. Condominium Sales Reach Record High on Low Rates

May 06, 2003|From Bloomberg News

WASHINGTON — U.S. condominium and cooperatively owned apartment sales rose to a record in the first quarter, spurred by mortgage rates at four-decade lows, according to figures released Monday by the National Assn. of Realtors.

Sales rose 3.2% to 846,000 at a seasonally adjusted annual rate, from 820,000 in the prior quarter, the Washington-based trade group said. The previous record was 824,000 set in the second quarter of last year.

The rise in sales of condominiums, which typically are smaller and less expensive than single-family homes, reflects demand from first-time buyers who want to take advantage of low mortgage rates and older buyers who are tired of cutting lawns, said David Lereah, chief economist for the group.

"Younger buyers who want to take advantage of the 40-year lows in mortgage rates often end up buying condos because they're cheaper," Lereah said. "Their parents, the baby boomers, are buying condos as a way to simplify their lives."

The oldest members of the baby boom generation, the 76 million Americans born from 1946 to 1964 who account for 29% of the U.S. population, are turning 57 this year, and their children are in their 30s.

The median, or midpoint, price for condominiums was $150,700, 13% higher than the year-ago quarter. The median price of a single-family home was $161,500 in the quarter, up 7% from a year earlier.

The average U.S. rate for a 30-year fixed mortgage dropped to 5.61% during the week ended March 14, the lowest since the early 1960s, according to Freddie Mac, the No. 2 mortgage buyer after its rival Fannie Mae.

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