Housing Holds Steady

Don Hogsett, July 11, 2005

Helped by persistently low mortgage rates, the broad U.S. housing market held relatively steady during May, holding on to last month's gains, with housing starts and new home sales advancing, while sales of lower-priced existing homes dipped slightly.

Following on a big 11 percent increase the prior month, housing starts moved up only slightly, edging ahead 0.2 percent to a seasonally adjusted level of 2.01 million units. New home sales picked up 2.1 percent after a modest 02. percent increase during April.

Sales of existing homes, which account for roughly 70 percent of the total U.S. housing market, backed off modestly, slipping 0.7 percent after rising 4.5 percent the preceding month. But even with the dip, resales were at their second highest pace on record, the National Association of Realtors reported.

David Lereah, chief economist for the realtors' trade group, said low interest rates and job growth are driving home sales. "Most of the stars continue to be correctly aligned for the housing market," he said. "An ongoing problem is the tight supply of homes available for sales, which is pushing gains in home prices."

Housing By Region
Month-To-Month % Change

Source: U.S. Department of Commerce and National Association of Realtors
Northeast 0.0% 5.1% -24.5%
Midwest -3.0 18.7 22.9
South -0.7 -12.1 -0.8
West 1.9 12.3 1.7

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