After falling for four consecutive months, existing home sales held its ground in August, according to the latest report from the National Association of Realtors.
Total existing home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, remained unchanged from July at a seasonally adjusted rate of 5.34 million in August. The report showed sales are 1.5% below August 2017's rate.
NAR Chief Economist Lawrence Yun said that the decline in existing home sales seen in previous months 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 said. “With inventory stabilizing and modestly rising, buyers appear ready to step back into the market.”
The median existing home price for all housing types increased to $264,800, surpassing last August’s $253,100. This is a 4.6% increase from August last year and marks the 78th straight month of year-over-year gains.
Total housing available for sale held steady at the end of August at 1.92 million existing homes on the market and is up from last year’s total of 1.87 million. Unsold inventory rests at a 4.3-month supply at the current sales pace, remaining unchanged from last month’s total but up 4.1 months last year.
“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,” Yun said. “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.”
Properties stayed on the market an average of 29 days in August, rising from 27 days in July but still down from 30 days in 2017. The report states that 52% of homes stayed on the market for less than a month.
The report states, the average commitment rate for a 30-year, conventional, fixed-rate mortgage increased from 4.53% the month prior to 4.55% in July, and the average commitment rate for all of 2017 remained at 3.99%, according to Freddie Mac.
“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,” Yun stated. “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 were 31% of sales in July, which is a decrease from 32% in July but remains the same as 31% in 2017. NAR revealed that the annual share of first-time buyers was 34%.
“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, they are concerned that they will not be able to find a new home to purchase,” NAR President Elizabeth Mendenhall said. “Unfortunately, this fluctuating view is contributing to the short supply of homes.”
Mendenhall says buyers hoping to find an entry level home in this market should work with a Realtor and be prepared to move quickly.
Existing home sales in the Northeast climbed 7.6% to an annual rate of 710,000 in August but is 2.7% below a year ago. The median price in the Northeast increased 2.6% from August 2017 and came in at 292,800.
In the Midwest, existing-home sales rose 2.4% to an annual rate of 1.28 million in August and are still 0.8% below August 2017. The median price in the Midwest was $208,500, increasing 3.4% from this time last year.
Southern existing-home sales inched back 0.4% to an annual rate of 2.23 million in August, increasing from 2.19 million a year ago. The median price in the South was $227,900, increasing 3.2% from August 2017.
Existing home sales in the West fell 5.9% to an annual rate of 1.12 million in August, which is 7.4% below August 2017. The median price in the West was $392,900, increasing 4.8% from this time last year.