Housing sales set white-hot pace

Local and national home sales kept up a torrid pace in June with Massachusetts home prices rising 12.8 percent from a year ago as confident consumers took advantage of low mortgage rates, said two reports released yesterday.

''What I'm seeing is a strong, active market that's a reflection of the improving Massachusetts economy," said Judy Moore, president of the Massachusetts Association of Realtors.

''There's still high demand and not enough supply."

In Massachusetts, the median June sales price for a detached single-family home was $360,000, up 12.8 percent from a year ago, Moore's group said.

Nationwide, the median June sales price for an existing single-family home was a record $191,800, up 9.6 percent, the National Association of Realtors reported. The unexpectedly strong pace of sales also set a record.

An economy adding jobs while mortgage rates remain near historic lows -- under 6 percent as of last week -- explained the strong results, analysts said.

Bay State condominium sales also hit an all-time high on a volume basis, the Massachusetts realtors group said.

''There's tremendous demand," added Kevin Ahearn, president of Otis & Ahearn, a Boston brokerage.

The June report reflected trends evident for several years. Priced out of the market for single-family homes, many first-time buyers continue to look to condominiums as their starter homes, and empty-nesters looking to downsize also have kept the market hot.

In June, 2,317 Massachusetts condominiums were purchased, up 41.9 percent from June 2003.

The median sales price of condos last month was $265,000, up 12.8 percent from a year ago.

Demographics continue to fuel the popularity of condominiums, said Nicolas Retsinas, director of Harvard University's Joint Center for Housing Studies; condos appeal to buyers without small children, and the number of Boston households without small children is growing.

Many analysts expect an improving economy will eventually result in higher mortgage rates, which will moderate the pace of housing sales and price increases.

''Presumably, we're at the tail end of a strong housing market brought about by historically low mortgage rates," said Frederick Breimyer, president of the New England Economic Partnership, a forecasting group.

As tracked by Freddie Mac, a purchaser of mortgages, mortgage rates hit a historic low in June 2003 when the weekly average for a 30-year fixed-rate mortgage was 5.21 percent.

Before drifting downward to 5.98 percent last week, rates mostly moved upward from mid-March to mid-June. A belief that rates will rise can motivate fence-sitting buyers to make a move.

''It instills them with a sense of they better do something now or be willing to wait a long time," Breimyer said.

Nationwide, sales of existing single-family homes set another record in June, the National Association of Realtors said; they rose to a seasonally adjusted annual rate of 6.95 million units, up 17.4 percent from the pace in June 2003.

''Although we've been expecting sales to ease, it's clear the market has tremendous momentum," said David Lereah, the group's economist, said in a statement. ''The improving job market and higher consumer confidence are feeding into a large demographic demand for housing. It's unlikely we'll top the pace in June, but home sales remain very healthy and are likely to stay quite strong, even with some easing expected in the second half of the year."

On a volume basis in June, the number of detached single-family homes sold in Massachusetts was 5,898, up 15.7 percent from 5,096 in June, 2003, the Massachusetts Association of Realtors said.

Chris Reidy can be reached at reidy@globe.com.