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A record sales pace for co-ops, condos

Condominium and cooperative apartment sales rose to a record in the second quarter, fueled by the lowest mortgage rates in 45 years, the National Association of Realtors said last week.

Sales climbed 4 percent to 861,000 at a seasonally adjusted annual rate, from 828,000 in the first quarter, said Lawrence Yun, an economist at the association.

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The average 30-year fixed-rate mortgage fell to a record 5.21 percent in June.

The median price for a condominium was $163,500, a 15 percent gain from the second quarter last year, making it the third-fastest rate of appreciation since the group began tracking sales in 1983.

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A rise in mortgage rates since June, prompted by signs that the economy is improving, means the sales record probably won't be beaten this quarter, Yun said.

Sales for the year will "easily" set a record, he said.

About 97 percent of the properties sold in the second quarter were condominiums, and about 3 percent were cooperatively owned apartments.

The average 30-year fixed rate rose to 6.34 percent last week, an increase of more than 1 percentage point over June's 5.21 percent, according to Freddie Mac. The rate probably will average 6 percent in 2003, compared with 6.5 percent last year, Yun said.

Compared with condominiums, the median price for a single- family home rose more slowly, by 7.4 percent to $168,900 in the second quarter last year.

Condominiums are cheaper than single-family homes in most U.S. markets, creating more demand among first-time buyers and faster price appreciation, the association said.


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