Existing home sales in the United States stumbled in August for the fourth time in five months as strained supply levels continue to subdue overall activity, according to the latest index report.
Sales gains in the Northeast and Midwest were outpaced by declines in the South and West as overall
Transactions fell 1.7% month on month, meaning that activity was up just 0.2% compared to August 2016.
The data from the National Association of Realtors (NAR) also shows that he median price for all housing types in August was $253,500, % from August 2016 and the 66th month in a row that prices have risen year on year.
According to Lawrence Yun, NAR chief economist, the slump in existing sales stretched into August despite what remains a solid level of demand for buying a home. ‘Steady employment gains, slowly rising incomes and lower mortgage rates generated sustained buyer interest all summer long, but unfortunately, not more home sales,’ he said.
‘What’s ailing the housing market and continues to weigh on overall sales is the inadequate levels of available inventory and the upward pressure it’s putting on prices in several parts of the country. Sales have been unable to break out because there are simply not enough homes for sale,’ he explained.
‘Some of the South region’s decline in closings can be attributed to the devastation Hurricane Harvey caused to the greater Houston area. Sales will be impacted the rest of the year in Houston, as well as in the most severely affected areas in Florida from Hurricane Irma. However, nearly all of the lost activity will likely show up in 2018,’ he added.
Total housing inventory at the end of August fell by 2.1% to 1.88 million and is now 6.5% lower than a year ago and has fallen year on year for 27 consecutive months. Unsold inventory is at a 4.2 month supply at the current sales pace, which is down from 4.5 months a year ago.
Properties typically stayed on the market for 30 days in August, which is unchanged from July and down from 36 days a year ago and 51% of homes sold in August were on the market for less than a month.
‘Market conditions continue to be stressful and challenging for both prospective first-time buyers and homeowners looking to trade up. The ongoing rise in home prices is straining the budgets of some of these would be buyers, and what is available for sale is moving off the market quickly because supply remains minimal in the lower and mid-price ranges,’ Yun pointed out.
Some 31% of sales were to first time buyers, down from 33% percent in July and the lowest share since last August and cash sales took 20% of the market.
A breakdown of the figures shows that single family home sales decreased 2.1% but are still 0.4% above the 4.72 million pace a year ago while the median price in this sector was $255,500, up 5.6% from August 2016.
Existing condominium and co-op sales climbed 1.7% but are still 1.6% below a year ago. The median existing condo price was $237,600 in August, which is 5.4% above a year ago.
Sales in the Northeast jumped 10.8% and are now 1.4% above a year ago. The median price in the Northeast was $289,500, which is 5.6% above August 2016 while in the Midwest, sales increases 2.4% and are now 0.8% above a year ago with a median price of $200,500, up 5% year on year.
Existing home sales in the South decreased 5.7% and are now 0.9% lower than a year ago. The median price in the South was $220,400, up 5.4% from a year ago while in the West sales fell 4.8% but are still 0.8% above a year ago with a median price of $374,700, up 7.7% from August 2016.
