Existing home sales slipped 1.6% in August from a year earlier, according to the RE/MAX National Housing Report based on its analysis of the 53 metro areas it tracks.
Following July's year-over-year sales increase of 2.3%, the slight August decline marks the sixth month of 2019 that produced fewer sales than 2018.
Buyer demand outpaced homes listed for sale in August, causing the largest inventory decline in 13 months. An analysis of the report's 53 metro areas shows August inventory shrank 5.5% year-over-year, the largest drop since 7.8% in July 2018. August's inventory contraction followed July's year-over-year inventory decline of 1.5% after nine consecutive months of year-over-year inventory growth. Months Supply of Inventory decreased to 2.8 compared to 2.9 in July 2019 and eclipsed the previous August low in the report's 11-year history.
"The modest inventory growth that started last fall has been swallowed up by demand as buyers have returned to the market, likely spurred on by attractive interest rates," said RE/MAX CEO Adam Contos. "Home sales dipping at the same time inventory falls suggests there may have been some reluctance on the part of sellers to list their homes. Nevertheless, demand is again ahead of supply, extending the favorable seller's market that has been in place for several years."
Inventory has remained below four months in 39 of the last 42 months, dating back to March 2016. Six months is considered a market balanced between sellers and buyers.
Homes moved quickly and August saw a year-over-year price increase of 5.7%, further evidence of buyer demand. The August Days on Market total of 44 represented the second-fastest pace of August home sales in the report's history. The previous record was set last August, when homes sold in an average of 43 days.
August weighed in as the eighth consecutive month of year-over-year price growth as the Median Sales Price rose to $263,000. Going back to February 2012, prices have increased year over year in 89 of the past 91 months.
Despite the favorable conditions for sellers, RE/Max saw encouraging signs for buyers in the last of 2019's peak months for home sales:
Of the 53 metro areas surveyed in August 2019, the overall average number of home sales is down 4.2% compared to July 2019, and down 1.6% compared to August 2018. Leading the month-over-month sales percentage decrease were Miam at -13.5%, Dover, N.H. at -13.1%, and Washington, D.C. at -10.3%.
In August 2019, the median of all 53 metro Median Sales Prices was $263,000, down 3.6% from July 2019, and up 5.7% from August 2018. Two metro areas saw a year-over-year decrease in Median Sales Price: San Francisco at -3.2% and Wichita at -1.2%. Six metro areas increased year-over-year by double-digit percentages, with the largest increases seen in Birmingham at +13.2%, Milwaukee at +11.3%, and Manchester, N.H. at +11.2%.
The average Days on Market for homes sold in August 2019 was 44, up one day from the average in July 2019, and up one day from the August 2018 average. The metro areas with the lowest Days on Market were Omaha at 19, Cincinnati at 25, and Nashvilleat 28. The highest Days on Market averages were in Des Moines at 95, Miami at 79, and Hartford at 75. Days on Market is the number of days between when a home is first listed in an MLS and a sales contract is signed.
The number of homes for sale in August 2019 was down 3.9% from July 2019 and down 5.5% from August 2018. Based on the rate of home sales in August 2019, the Months Supply of Inventory was 2.8, a decrease compared to 2.9 in July 2019 and 3.5 in August 2018. A six months supply indicates a market balanced equally between buyers and sellers. In August 2019, of the 53 metro areas surveyed, only Miami, Fla., at 6.9, reported a months supply at or over six, which is typically considered a buyer's market. The markets with the lowest Months Supply of Inventory were Phoenix and Manchester, N.H., both at 1.5.