August Existing Home Sales Sour for Fifth Straight Month

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The National Association of Realtors (NAR) reported Thursday morning that the seasonally adjusted annual rate of existing home sales in August was unchanged with a seasonally adjusted annual rate of 5.34 million. The July rate fell from 5.38 million in June.

Year over year, sales had fallen in each of the four preceding months, so the fact that August sales were flat is no serious improvement. Existing home sales remain down 1.5% year to date compared with 2017. The consensus estimate called for sales to reach 5.36 million, according to a survey of economists polled by Bloomberg.

In 2017, existing home sales rose 1.1% year over year, the best level in 11 years. The seasonally adjusted annual rate came in at 5.51 million, the highest since posting 6.48 million in 2006.

The NAR’s chief economist, Lawrence Yun, said:

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. With inventory stabilizing and modestly rising, buyers appear ready to step back into the market.

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. 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.

Housing inventory remained unchanged as well in August at 1.92 million homes, equal to a supply of 4.3 months. Inventory in August of last year totaled 1.87 million homes.

According to the NAR, the national median existing home price for all housing types in August slipped from $269,600 in July to $264,800. Year over year, the median price rose 4.6%. Home prices have now risen on a year-over-year comparison basis for 78 consecutive months.

The percentage of first-time buyers fell by a point month over month to 31%. For all of 2017, first-time buyers accounted for 34% of sales, down one percentage point compared with 2016.

Sales of single-family homes remained flat with the July seasonally adjusted annual rate of 4.75 million and were down 1% compared with August 2017. Sales of multifamily homes were also flat in August at a seasonally adjusted annual rate of 590,000 units.

All homes were on the market for an average of 29 days in August, up by two days month over month and down from 30 days in August 2017. Foreclosure (2%) and short (1%) sales accounted for 3% of all July sales, unchanged compared with the prior month and down from 4% in August 2017. The percentage of distressed sales remains at its lowest level since the NAR began tracking it in October 2008.

The NAR also reported the following regional data:

August existing-home sales in the Northeast rose 7.6% to an annual rate of 710,000 but were down 2.7% compared with August 2017 sales. The median price in the Northeast was $292,800, up 2.6% compared with August of last year.

In the Midwest, existing home sales rose 2.4% to post an annual rate of 1.28 million in August, but they remain down 0.8% compared with the August 2017 rate. The median price in the Midwest was $208,500, up 3.4% from a year ago.

Existing home sales in the South slipped 0.4% in August to an annual rate of 2.23 million but were up from 2.19 million sales compared to August 2017 sales. The median price in the South was $227,900, up 3.2% from a year ago.

Existing home sales in the West fell 5.9% to an annual rate of 1.12 million in August and were down 7.4% compared with August 2017 totals. The median price in the West was $392,900, up 4.8% compared with the August 2017 median.