By Daniela Deane Washington Post Staff Writer Monday, August 26, 2002; 11:57 AM

Sales of both new homes and previously owned homes stayed healthy in July, with new homes posting a monthly record. Some of the lowest mortgage rates in years kept Americans buying.

New-home sales shot up 6.7 percent to an annual rate of a 1.02 million homes, the highest one-month level ever. The sales of existing homes rose 4.5 percent to an annual rate of 5.33 million.

The national housing market continues to outperform other sectors of the economy, led in part by historically low mortgage rates. In July, the average rate for a 30-year fixed-rate mortgage was 6.49 percent, down from 6.65 percent in June, and well below the 7.13 percent rate for July a year ago, according to Freddie Mac, the mortgage company.

The continuing housing boom is likely to have a positive impact on the sales of home furnishings and other home products down the line. Low mortgage rates have also lead millions of Americans to refinance their mortgages, many taking cash out, a huge boost for national spending.

By region, new-home sales in July soared 16 percent in the Midwest to a rate of 203,000, the highest level since December 1993. In the South, sales jumped 10.1 percent to a rate of 470,000, the highest level since November. But in the Northeast, sales fell by 9.1 percent to a rate of 60,000, and in the West, they dipped by 0.4 percent to a rate of 284,000.

The average price of a new home in July was $215,200, up from $209,300 for the same month a year ago.

For existing homes, July's sales jumped 10.2 percent in the Midwest to a rate of 1.19 million. In the South, sales rose 6.4 percent to a pace of 2.17 million and in the Northeast, they went up 4.9 percent to a rate of 640,000. But in the West, sales slipped 2.9 percent to a rate of 1.33 million.

The housing supply also continues to remain tight, meaning that the demand for housing continues to outpace the supply. That scenario means that sales are likely to remain healthy for the foreseeable future.

The Associated Press contributed to this report.

© 2002 The Washington Post Company

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