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Existing-home sales moved lower in August, according to the National Association of Realtors®. Among the four major U.S. regions, sales improved in the Midwest, were unchanged in the Northeast, and slipped in the South and West. All four regions recorded year-over-year sales declines.

Total existing-home sales[i] – completed transactions that include single-family homes, townhomes, condominiums and co-ops – slid 0.7% from July to a seasonally adjusted annual rate of 4.04 million in August. Year-over-year, sales fell 15.3% (down from 4.77 million in August 2022).

“Home sales have been stable for several months, neither rising nor falling in any meaningful way,” said NAR Chief Economist Lawrence Yun. “Mortgage rate changes will have a big impact over the short run, while job gains will have a steady, positive impact over the long run. The South had a lighter decline in sales from a year ago due to greater regional job growth since coming out of the pandemic lockdown.”

Total housing inventory[ii] registered at the end of August was 1.1 million units, down 0.9% from July and 14.1% from one year ago (1.28 million). Unsold inventory sits at a 3.3-month supply at the current sales pace, identical to July and up from 3.2 months in August 2022.

The median existing-home price[iii] for all housing types in August was $407,100, an increase of 3.9% from August 2022 ($391,700). All four U.S. regions posted price increases.

“Home prices continue to march higher despite lower home sales,” Yun said. “Supply needs to essentially double to moderate home price gains.”

REALTORS® Confidence Index

According to the REALTORS® Confidence Index, properties typically remained on the market for 20 days in August, unchanged from July and up from 16 days in August 2022. Seventy-two percent of homes sold in August were on the market for less than a month.

First-time buyers were responsible for 29% of sales in August, down from 30% in July and identical to August 2022. NAR’s 2022 Profile of Home Buyers and Sellers – released in November 2022[iv] – found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.

All-cash sales accounted for 27% of transactions in August, up from 26% in July and 24% in August 2022.

Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in August, the same share as in July and one year ago.

Distressed sales[v] – foreclosures and short sales – represented 1% of sales in August, unchanged from last month and the previous year.

Mortgage Rates

According to Freddie Mac, the 30-year fixed-rate mortgage averaged 7.18% as of September 14. That’s up from 7.12% the prior week and 6.02% one year ago.

Single-family and Condo/Co-op Sales

Single-family home sales waned to a seasonally adjusted annual rate of 3.60 million in August, down 1.4% from 3.65 million in July and 15.3% from the previous year. The median existing single-family home price was $413,500 in August, up 3.7% from August 2022.

Existing condominium and co-op sales recorded a seasonally adjusted annual rate of 440,000 units in August, up 4.8% from July but down 15.4% from one year ago. The median existing condo price was $354,600 in August, up 6.2% from the prior year ($333,900).

Regional Breakdown

At an annual rate of 480,000 in August, existing-home sales in the Northeast were unchanged from July but down 22.6% from August 2022. The median price in the Northeast was $465,700, up 5.8% from one year ago.

In the Midwest, existing-home sales increased by 1.0% from the previous month to an annual rate of 970,000 in August, down 16.4% from the prior year. The median price in the Midwest was $305,300, up 6.8% from August 2022.

Existing-home sales in the South faded 1.1% from July to an annual rate of 1.84 million in August, a decrease of 12.4% from one year ago. The median price in the South was $366,100, up 3.2% from August 2022.

In the West, existing-home sales slumped 2.6% from the previous month to an annual rate of 750,000 in August, down 15.7% from the prior year. The median price in the West was $609,300, up 1.0% from August 2022.

 

[i] Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR benchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.

Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90% of total home sales, are based on a much larger data sample – about 40% of multiple listing service data each month – and typically are not subject to large prior-month revisions.

              The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

              Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

[ii] Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90% of transactions and condos were measured only on a quarterly basis).

[iii] The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.

The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.

[iv] Survey results represent owner-occupants and differ from separately reported monthly findings from NAR’s Realtors® Confidence Index, which include all types of buyers. The annual study only represents primary residence purchases, and does not include investor and vacation home buyers. Results include both new and existing homes.

[v] Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s Realtors® Confidence Index, posted at nar.realtor.

Posted On Friday, 22 September 2023 09:03 Written by
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