by Despite a glut of unsold homes, prices continue to rise in all 4 regions of the US
WASHINGTON — Existing home sales fell 4.2% in August from a year earlier, as home sales dropped in three U.S. regions, but remained stable in the Northeast.
The National Association of Realtors reported Thursday that existing home sales totaled 3.86 million, compared with 4.03 million in August 2023, a 4.2% drop. They also fell 2.5% from July, with declines in the Northeast, South and West, but no change in the Midwest.
Single-family home sales fell 2.8% to 3.48 million units, a 3.3% decrease from August 2023. Meanwhile condominium and co-op sales totaled 380,000 in August, down 11.6% from 430,000 units in August 2023. The sales rate was level with July.
Prices also continue to rise in all four regions of the U.S. with the median existing home price for all types of homes increasing 3.1% in August, to $416,700 from $404,200 a year ago. The median price for single-family homes was $422,100 in August, up 2.9% from August 2023 and the median existing condo price was $366,500, up 3.5% from $354,200 in August 2023.
Prices rose alongside an ongoing increase in the amount of inventory on the market. The total amount of unsold homes totaled 1.35 million units, up 22.7% from 1.1 million in August 2023 and .7% from 1.34 million in July. The NAR said that unsold inventory is at a 4.2-month supply based on the current sales pace, up from 3.3 months in August 2023 and 4.1 months in July.
“Home sales were disappointing in August, but the recent development of lower mortgage rates coupled with increasing inventory is a powerful combination that will provide the environment for sales to move higher in future months,” said Lawrence Yun, the NAR’s chief economist. “The home-buying process, from the initial search to getting the house keys typically takes several months.”
Yun added that the rise in inventory and housing supply signals that homebuyers are in a “much improved position to find the right home and at more favorable prices. However, in areas where supply remains limited, like many markets in the Northeast, sellers still appear to hold the upper hand.”
The news offers a window into the state of the existing home sales market just as the Fed announced its first interest rate drop in more than four years. Thus, all eyes will be on the market for existing homes as mortgage rates approach the 6% mark. The NAR report said that according to Freddie Mac, the 30-year fixed rate mortgage averaged 6.2% as of Sept. 12, roughly a week before the Fed’s announcement and down from 6.35% a week earlier and 7.18% a year earlier.
By region the activity was as follows:
+ In the Northeast, existing home sales totaled 480,000, the same as August 2023 but down 2% from July. The median home price in the region was $503,200, up 7.7% from August 2023.
+ In the Midwest, existing home sales totaled 920,000, down 5.2% from August 2023 and level with July. The median price was $315,400, up 3.8% from August 2023.
+ In the South, existing home sales totaled 1.73 million, down 6% from August 2023 and down 3.9% from July. The median price was $367,000, up 1.6% from August 2023.
+ In the West, existing home sales totaled 730,000, down 1.4% from August 2023 and down 2.7% from July. The median price in the region was $622,500, up 2.2% from August 2023.
Other highlights of the report were as follows:
+ Properties remained on the market 26 days in August, up from 20 days in August last year and up from 24 days in July.
+ First-time buyers represented 26% of sales in August, down 29% from both August last year and July. It also matched an all-time low last seen in November 2021, the NAR said.
+ All cash sales represented 26% of transactions in August, down from 27% in both August 2023 and July. Individual investors, or second-home buyers that account for many all-cash sales, purchased 19% of existing homes in August, down from 16% in August 2023 and down from 13% in July.
+ Distressed sales, including foreclosures and short sales, accounted for 1% of sales in August, level with both August 2023 and July.
