NAR: U.S. existing-home sales unchanged in Aug
WASHINGTON – Sept. 20, 2018 – Existing-home sales remained steady in August after four straight months of decline, according to the National Association of Realtors® (NAR). Sales gains in the Northeast and Midwest canceled out downturns in the South and West.
Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – did not change from July and remained at a seasonally adjusted rate of 5.34 million in August. Sales are now down 1.5 percent year-to-year.
Lawrence Yun, NAR chief economist, says the decline in existing home sales appears to have hit a plateau with robust regional sales.
"Strong gains in the Northeast and a moderate uptick in the Midwest helped to balance out any losses in the South and West, halting months of downward momentum," Yun says. "With inventory stabilizing and modestly rising, buyers appear ready to step back into the market."
The median existing-home price for all housing types in August was $264,800, up 4.6 percent from August 2017 ($253,100). August's price increase marks the 78th straight month of year-over-year gains.
Total housing inventory at the end of August also remained unchanged from July at 1.92 million existing homes available for sale, which is an increase from 1.87 million a year ago. Unsold inventory is at a 4.3-month supply at the current sales pace, consistent from last month and up from 4.1 months a year ago.
Properties typically stayed on the market for 29 days in August, up from 27 days in July but down from 30 days a year ago – and 52 percent of homes 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," says 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."
According to Freddie Mac, 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. The average commitment rate for all of 2017 was 3.99 percent.
"Rising interests rates along with high home prices and lack of inventory continues to push entry-level and first-time homebuyers out of the market," says 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."
First-time buyers made up 31 percent of sales in August, down from July (32 percent) but at the same level as one year earlier.
"Realtors across the country report that their clients waver about the decision to list their home; they are excited by the prospect of receiving many offers, but they are concerned that they will not be able to find a new home to purchase," says NAR President Elizabeth Mendenhall. "Unfortunately, this fluctuating view is contributing to the short supply of homes. Buyers hoping to find an entry level home in this market should work with a Realtor and be prepared to move quickly as listings sell quickly."
All-cash sales were 20 percent of transactions in August, unchanged from July and a year ago. Individual investors, who account for many cash sales, purchased 13 percent of homes in August – unchanged from July and down from 15 percent a year ago.
Distressed sales – foreclosures and short sales – were 3 percent of sales in August (lowest since NAR began tracking in October 2008), unchanged from last month and down from 4 percent a year ago. Two percent of June sales were foreclosures and 1 percent were short sales.
Single-family and condo/co-op sales
Single-family home sales were at a seasonally adjusted annual rate of 4.75 million in August, unchanged from July, and they're 1.0 percent below the 4.8 million sales pace a year ago. The median existing single-family home price was $267,300 in August, up 4.9 percent from August 2017.
Existing condominium and co-op sales were at a seasonally adjusted annual rate of 590,000 units in August (unchanged from last month). They're down 4.8 percent from a year ago. The median existing condo price was $244,500 in August, which is up 2.0 percent year-to-year.
August existing-home sales in the Northeast increased 7.6 percent to an annual rate of 710,000 – 2.7 percent below a year ago. The median price in the Northeast was $292,800, which is up 2.6 percent from August 2017.
In the Midwest, existing-home sales rose 2.4 percent to an annual rate of 1.28 million in August, but they're still down 0.8 percent from a year ago. The median price in the Midwest was $208,500, up 3.4 percent year-to-year.
Existing-home sales in the South decreased 0.4 percent to an annual rate of 2.23 million in August, up from 2.19 million a year ago. The median price in the South was $227,900, up 3.2 percent from a year ago.
Existing-home sales in the West dropped 5.9 percent to an annual rate of 1.12 million in August – 7.4 percent below a year ago. The median price in the West was $392,900, up 4.8 percent from August 2017.
© 2018 Florida Realtors®
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