Existing-home sales inched up in August, the second consecutive month of growth, according to the National Association of Realtors. Three of the four major regions reported a rise in sales, while the West recorded a decline last month.
Total existing-home sales rose 1.3% from July to a seasonally adjusted annual rate of 5.49 million in August. Overall sales are up 2.6% from a year ago (5.35 million in August 2018).
August existing-home sales in the Northeast increased 7.6% to an annual rate of 710,000, a 1.4% rise from a year ago. The median price in the Northeast was $303,500, down 0.3% from August 2018. In the Midwest, existing-home sales grew 3.1% to an annual rate of 1.31 million, which is a 2.3% increase from August 2018. The median price in the Midwest was $220,000, a 6.6% jump from a year ago.
Existing-home sales in the South increased 0.9% to an annual rate of 2.33 million in August, up 3.6% from a year ago. The median price in the South was $240,300, up 5.4% from one year ago. Existing-home sales in the West declined 3.4% to an annual rate of 1.14 million in August, 1.8% above a year ago. The median price in the West was $415,900, up 5.7% from August 2018.
Lawrence Yun, NAR’s chief economist, attributed the increase in sales to falling mortgage rates. “As expected, buyers are finding it hard to resist the current rates,” he said. “The desire to take advantage of these promising conditions is leading more buyers to the market.”
The median existing-home price for all housing types in August was $278,200, up 4.7% from August 2018 ($265,600). August’s price increase marks the 90th straight month of year-over-year gains.
“Sales are up, but inventory numbers remain low and are thereby pushing up home prices,” said Yun. “Home builders need to ramp up new housing, as the failure to increase construction will put home prices in danger of increasing at a faster pace than income.”
Total housing inventory at the end of August decreased to 1.86 million, down from 1.90 million existing-homes available for sale in July, and marking a 2.6% decrease from 1.91 million one year ago. Unsold inventory is at a 4.1-month supply at the current sales pace, down from 4.2 months in July and from the 4.3-month figure recorded in August 2018.
Properties typically remained on the market for 31 days in August, up from 29 days in July and in August of 2018; 49% of homes sold in August were on the market for less than a month.
“The Federal Reserve should have been bolder and made a deeper rate cut, given current low inflation rates,” said Yun. “The housing sector has been broadly underperforming, but there is huge upward potential there that will help our overall economy grow.”
First-time buyers were responsible for 31% of sales in August, down from 32% in July and equal to the 31% recorded in August 2018. NAR’s 2018 Profile of Home Buyers and Sellers – released in late 2018 – revealed that the annual share of first-time buyers was 33%.
As the share of first-time buyers rose, individual investors or second-home buyers, who account for many cash sales, purchased 14% of homes in August 2019, up from 11% recorded in July and from 13% recorded in August a year ago. All-cash sales accounted for 19% of transactions in August, about equal to July’s percentage and moderately down from August 2018 (19% and 20%, respectively).
Distressed sales – foreclosures and short sales – represented 2% of sales in August, unchanged from July, but down from 3% in August 2018.
“Rates continue to be historically low, which is extremely beneficial for everyone buying or selling a home,” said NAR President John Smaby, a second-generation Realtor from Edina, Minnesota, and broker at Edina Realty. “The new condominium loan policies, as well as other reforms NAR is pursuing within our housing finance system, will allow even more families and individuals in this country to reach the American Dream of homeownership.”
Single-family home sales sat at a seasonally adjusted annual rate of 4.90 million in August, up from4.84 million in July and up 2.9% from a year ago. The median existing single-family home price was $280,700 in August 2019, up 4.7% from August 2018.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 590,000 units in August, 1.7% above the rate from the previous month and about equal to a year ago. The median existing condo price was $257,600 in August, which is up 5.2% from a year ago.