Existing-home sales continue momentum in August

Existing-home sales increased for a third consecutive month in August while reaching their highest level since December 2006.

Total existing-home sales, including single-family homes, townhomes, condos, and co-ops increased 2.4% from July to a seasonally adjusted rate of 6 million in August, the National Association of Realtors (NAR) reported this morning. Year-over-year sales are up 10.5% from a year ago and a rate of 5.43 million in August 2019.

Single-family home sales increased 1.7% to a seasonally-adjusted annual rate of 5.37 million compared to 5.28 million in July and increased 11% from one year ago. But the median existing single-family home price was $315,000 in August, up 11.7% from August 2019.

“Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market,” said Lawrence Yun, NAR’s chief economist. “Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3% and with continued job recovery.”

Existing condo and co-op sales reached a seasonally adjusted annual rate of 630,000 units in August, up 8.6% from July and up 6.8% from one year ago. The median existing condo price was $273,300 in August, an increase of 7.8% from a year ago.

The median existing-home price for all housing types in August was $310,600, up 11.4% from August 2019 ($278,800), as prices rose in every region. August’s national price increase marks 102 straight months of year-over-year gains.

Inventory could post a problem, however. 

Total housing inventory at the end of August totaled 1.49 million units, down 0.7% from July and down 18.6% from one year ago (1.83 million). Unsold inventory sits at just a 3-month supply at the current sales pace, down from 3.1 months in July and down from the 4-month figure recorded in August 2019.

Limited inventory has been problematic for the past few years, according to Yun, and is an issue he says has worsened in the past month due to the dramatic surge in lumber prices and the dearth of lumber resulting from California wildfires.

“Over recent months, we have seen lumber prices surge dramatically,” Yun said. “This has already led to an increase in the cost of multifamily housing and an even higher increase for single-family homes.” 

Here’s how existing-home sales break down by region:

• In the Northeast, existing-home sales increased 13.8% to an annual rate of 740,000, which is also a 5.7% increase from a year ago.
• Existing-home sales increased 1.4% in the Midwest to an annual rate of 1.41 million in August, up 9.3% from a year ago. 
• In the South, existing-home sales edged upward by 0.8% to an annual rate of 2.6 million in August, up 13.0% from the same time one year ago. 
• Existing-home sales in the West inched up 0.8% to an annual rate of 1,250,000 in August, a 9.6% increase from a year ago.

As prices climb, and affordability lessens, Yun continues to push for more residential construction.

“Housing demand is robust but supply is not, and this imbalance will inevitably harm affordability and hinder ownership opportunities,” he said. “To assure broad gains in homeownership, more new homes need to be constructed.”