Existing-home sales stand pat in August
Existing-home sales remained unchanged during August, snapping a four-month streak of stumbling sales.
Total existing-home sales stayed at a seasonally adjusted rate of 5.34 million in August, according to the National Association of Realtors. Sales are currently down 1.5 percent from a year ago.
Housing inventory is crawling to sustainable levels, but still fails to meet widespread demand across the country. Inventory remained unchanged from July at 1.92 million existing home sales available for sale. Unsold inventory was at a 4.3-monthly supply at the current sales pace and properties typically stayed on the market for 29 days in August. Fifty-two percent of homes sold last month were on the market for less than a month.
“While inventory continues to show modest year over year gains, it is still far from a healthy level and new home construction is not keeping up to satisfy demand,” said NAR chief economist Lawrence Yun. “Homes continue to fly off the shelves with a majority of properties selling within a month, indicating that more inventory – especially moderately priced, entry-level homes – would propel sales.”
Plenty of interested buyers continue to be priced out of the competitive market. The median existing-home price in August was $264,800, up 4.6 percent from last year. It was the 78th straight month of year-over-year gains in home prices.
Mortgage rates also saw a slight uptick in August. The average commitment rate for a 30-year, conventional, fixed-rate mortgage increased to 4.55 percent in August from 4.53 percent in July, according to Freddie Mac.
Low inventory, high prices and increasing mortgage rates are taking its toll on first-time home buyers. In August, first-time buyers represented only 31 percent of sales, which was down from 32 percent in July.
“Rising interest rates along with high home prices and lack of inventory continues to push entry-level and first-time home buyers out of the market,” said Yun. “Realtors® continue to report that the demand is there – that current renters want to become homeowners – but there simply are not enough properties available in their price range.”
The Northeast bounced back from a sluggish July, as existing-home sales increased by 7.6 percent. The median price in the Northeast increased by 2.6 percent from last year to $292,800.
Sales increased in the Midwest by 2.4 percent last month. The median price rose by 3.4 percent from last year to $208,500.
In the South, existing-home sales decreased by 0.4 percent, while the median price increased to $227,900.
Existing-home sales dropped by 5.9 percent in the West and the median price was the highest among all four regions at $392,900 last month.