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Home prices rise as sales slow
Wednesday, August 16, 2006

PHILADELPHIA -- Home prices in the Philadelphia metropolitan region rose by more than 11 percent in the second quarter, posting one of the strongest gains in the Northeast as areas that have seen less torrid growth outpaced once red-hot markets, a Realtor group reported on yesterday.

Elsewhere in Pennsylvania, single-family homes in Reading saw prices rise by 5.7 percent on average to $141,900, while those in Erie had a gain of 3.9 percent to $102,300, the National Association of Realtors said.

Pittsburgh posted a 1.5 percent increase to $120,300, and Allentown-Bethlehem-Easton was up 0.3 percent to $243,400.

The higher prices came even though home sales slipped 3.2 percent in the state, one of 28 states to see sales fall during the spring quarter, led by big drops in the formerly red-hot areas of Arizona, Florida and California, the Realtor's group said.

Nationally, sales of existing homes fell to a seasonally adjusted annual rate of 6.693 million units in the April-June quarter, down by 7.5 percent from the record rate of 7.193 million units in the spring of 2005, the Realtors said, even though single-family home prices rose nationwide by 3.7 percent.

The National Association of Home Builders also said its monthly survey of builder sentiment fell to its lowest level in more than 15 years amid record levels of unsold new and existing homes and increased cancellations of contracts for new homes.

The slowdown is occurring after a lengthy boom in which sales of both new and existing homes set records for five straight years as buyers flocked into the market, lured by the lowest mortgage rates in more than four decades. But mortgage rates have been climbing for most of this year, reflecting a two-year Federal Reserve campaign to push interest rates higher.

First published on August 16, 2006 at 12:00 am